Rates as of 0500 GMT

Market Recap

A profit warning hit the target Shares in US retailier Target Corp. were down as much as 28 at one point yesterday after the retailer missed profit forecasts and warned of a hit to margins from sales slowdown and excess inventory plus rising fuel and freight costs. It also noted a largerthanexpected shift in consumer spending away from stayathome categories like furniture and TVs as people resume spending money on services Wednesdays retail sales figures for example showed record spending at bars, restaurants, and cafes. That in turn weighed on the share prices of other leading US retailers, especially after Walmart had also highlighted margin risks the day before. Consumer staples 6.4 and consumer discretionary 6.6 were the worstperforming sectors in the SP 500.

The anxiety over the impact of high inflation on corporate earnings and consumer demand sent the whole market down. Note that while the SP 500 followed Target stock price for much of the day, Target started to recover a bit near the close but no such luck for the market as a whole.

Kind of strange shares in servicesector companies should be rallying on this news, because after all if people arent spending their money on TVs they must be spending it on something else but every sector was down. In fact only eight stocks in the entire SP 500 were up on the day!

This time though the fall in stocks was met with a rally in bonds, unlike previous selloffs that have been…