Raphael Stevens

Plastic bags hang on a self-checkout kiosk at a Target store in Chicago.
Daniel Acker | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.
Target — Target shares added 2.9% even after the retailer cut its full-year earnings forecast and second-quarter sales fell short of expectations. The company reported earnings of $1.80 per share on revenue of $24.77 billion. Wall Street analysts surveyed by Refinitiv had expected earnings of $1.39 per share on $25.16 billion in revenue. Inventory also improved year over year.

Coinbase — The U.S. cryptocurrency exchange slipped 0.2%. The National Futures Association, which has been designated by the Commodity Futures Trading Commission as a self-regulatory organization, approved the company to operate a futures trading service in addition to its already-standing spot crypto trading.
TJX Companies — The discount retailer jumped 4.1% after beating Wall Street expectations for its fiscal second quarter. TJX reported adjusted earnings of 85 cents per share on $12.76 billion in revenue, while analysts surveyed by Refinitiv expected 77 cents earned and $12.45 billion in revenue.
Coherent — Shares plummeted 29.9% a day after Coherent delivered weak guidance for its fiscal first quarter. The manufacturer of lasers and optics forecast earnings of 5 cents to 20 cents per share and revenue of $1 billion to $1.1 billion. Analysts polled by FactSet called for 47 cents per share in earnings and revenue of $1.16 billion.
VinFast Auto — The Vietnamese electric vehicle stock tumbled 18.8%. The company debuted on the Nasdaq on Tuesday and popped more than 250% that day.
JD.com — U.S. shares of the Chinese e-commerce company slid 3%, even as JD.com beat expectations on the top and bottom lines for its most recent quarter.

Keurig Dr Pepper — The beverage stock advanced 1.2% following a UBS upgrade to buy from neutral. The firm cited a cheap valuation in its decision.
H&R Block — The tax prep software stock popped 9.7%. The action follows a day after H&R Block announced a 10% hike to its dividend. The company also surpassed analysts’ expectations for its fiscal fourth quarter, posting adjusted earnings of $2.05 per share on revenue of $1.03 billion. Wall Street estimated earnings of $1.88 per share and revenue of $1.01 billion, per Refinitiv.
Agilent Technologies — Shares slid 3.4% a day after the laboratory technology company cut its full-year guidance, citing a soft macroeconomic environment. The company beat consensus estimates on both the top and bottom line. Agilent posted adjusted earnings of $1.43 per share on revenue of $1.67 billion, while analysts called for earnings of $1.36 per share and revenue of $1.66 billion, per Refinitiv.
Jack Henry & Associates — The financial technology stock retreated 7% after guiding expectations for full-year earnings under where analysts forecast. Jack Henry anticipates earnings of $4.92 to $4.99 per share, while analysts called for $5.32 a share, per Refinitiv. Elsewhere, the company beat expectations on both lines for its fiscal fourth quarter.
Mercury Systems — The aerospace stock climbed 6.9% despite a weak quarterly report and future guidance. Late Tuesday, Mercury posted 11 cents in adjusted earnings per share on $253.2 million of revenue in its fiscal fourth quarter, while the consensus estimates of analysts polled by FactSet placed earnings per share at 52 cents and revenue at $278.8 million.
Cava — Cava lost gained 1.2% after the Mediterranean restaurant chain reported a profit for its first quarter post-IPO. The company posted earnings of 21 cents per share on revenue of $172.9 million.
Jack in the Box — Shares of the restaurant stock rose 2.3% after Loop Capital reiterated its buy rating on Jack in the Box. Shares of the company have fallen for six straight sessions, due in part to a negative reaction by investors to Jack in the Box’s quarterly report last week. Loop Capital said in a note that the sell-off has created a “very attractive entry point.”
GE HealthCare — Shares added 0.2% after Wells Fargo initiated coverage of GE HealthCare with an overweight rating and $90 price target, which suggests 28% upside from Tuesday’s close. The Wall Street firm said the company’s Alzheimer’s drug Leqembi is a potential growth driver.
News Corp — Shares advanced 1% after Morgan Stanley resumed coverage of the media stock, saying shares should rise over the next two months.
Getty Images — The image platform’s stock slid 2.1% following an upgrade to outperform from in line by Imperial Capital. Imperial noted the company has a leading market position and can generate free cash flow.
Intel — Shares slid 3.6% after Intel announced Wednesday it will end its agreement to acquire Tower Semiconductor, citing a failure to obtain regulatory approvals in time. Intel is set to pay a $353 million termination fee to Tower. Shares of Tower Semiconductor tumbled 11%.
General Motors — General Motors declined 1.4% in midday trading. United Auto Workers President Shawn Fain said Tuesday that members have until Aug. 24 to authorize a strike if they don’t have a new contract agreement with the Big Three automakers by next month’s expiration of the current deal. He warned of slow progress in the union’s negotiations with automakers General Motors, Ford Motor and Stellantis.
— CNBC’s Sarah Min, Samantha Subin, Michelle Fox and Jesse Pound contributed reporting. More

Federal Reserve officials expressed concern at their most recent meeting about the pace of inflation and said more rate hikes could be necessary in the future unless conditions change, minutes released Wednesday from the session indicated.
That discussion during a two-day July meeting resulted in a quarter percentage point rate hike that markets generally expect to be the last one of this cycle.

However, discussions showed that most members worry that the inflation fight is far from over and could require additional tightening action from the rate-setting Federal Open Market Committee.
“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the meeting summary stated.
That latest increase brought the Fed’s key borrowing level, known as the federal funds rate, to a range targeted between 5.25%-5%, the highest level in more than 22 years. 
While some members have said since the meeting that they think the further rate hikes could be unnecessary, the minutes suggested caution. Officials noted pressure from a number of variables and stressed that future decisions will be based on incoming data.
“In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time,” the document said.

Lots of uncertainty

Indeed, the minutes suggested considerable misgivings over the future direction of policy.
While there was agreement that inflation is “unacceptably high,” there also was indication “that a number of tentative signs that inflation pressures could be abating.”
“Almost all” the meeting participants, which includes nonvoting members, were in favor of the rate increase. However, those opposed said they thought the committee could skip a hike and watch how previous increases are impacting economic conditions.
“Participants generally noted a high degree of uncertainty regarding the cumulative effects on the economy of past monetary policy tightening,” the minutes said.
The minutes noted that the economy was expected to slow and unemployment likely will rise somewhat. However, staff economists retracted an earlier forecast that troubles in the banking industry could lead to a mild recession this year.

Real estate concern

But there was concern over problems with commercial real estate.
Specifically, officials cited “risks associated with a potential sharp decline in CRE valuations that could adversely affect some banks and other financial institutions, such as insurance companies, that are heavily exposed to CRE. Several participants noted the susceptibility of some nonbank financial institutions” such as money market funds and the like.
For the future of policy, members emphasized two-sided risks of loosening policy too quickly and risking higher inflation against tightening too much and sending the economy into contraction.
Recent data shows that while inflation is still a good distance from the central bank’s 2% target, it has made marked progress since peaking above 9% in June 2022.
For instance, the consumer price index, a widely followed measure of goods and services costs, ran at a 3.2% 12-month rate in July. The Fed’s favorite measure, the personal consumption expenditures price index excluding food and energy, stood at 4.1% in June.
However, policymakers worry that declaring victory too soon could repeat critical mistakes of the past. In the 1970s, central bankers raised rates to combat double-digit inflation, but backed off quickly when prices showed tentative signs of backing off.
Despite the intent of the hikes to slow down the economy, they’ve had seemingly little effect on overall growth.
GDP gains have averaged above 2% in the first half of 2023, with the economy on pace to rise another 5.8% in the third quarter, according to updated projections from the Atlanta Fed.
At the same time, employment growth has slowed some but still remains robust. The unemployment rate was at 3.5% in July, hovering around its lowest level since the late 1960s. Job openings have come in some from record levels but still far outnumber the pool of available workers.
Some Fed officials of late have indicated that while rate cuts are unlikely this year, increases could be over. Regional Presidents John Williams of New York and Patrick Harker of Philadelphia, for instance, both said last week they could see a pathway to holding the line here. Market pricing is strongly pointing to no additional hikes, with less than a 40% chance of another increase priced in before the end of the year, according to CME Group data. More

Households across China have been thrown into panic over the past week. The company building their flats, Country Garden, missed $22.5m in coupon payments on August 6th. Now the firm, one of the world’s largest homebuilders, has until early September to make the payments or follow hundreds of other developers into default and restructuring. Trading in its bonds, which are worth just pennies on the dollar, was halted on August 14th.Local officials across the country are watching closely. Country Garden is renowned for building huge projects in China’s second- and third-tier cities. Its debts are smaller than those of Evergrande, a big, heavily indebted company that defaulted in 2021. But at the start of the year Country Garden was building four times more homes than Evergrande was before it defaulted. At the rate it was delivering them in the first half of 2022, at least 144,000 buyers will not receive keys to homes they were promised by the end of this year. A sudden debt meltdown at the firm would leave even more families out in the cold.China’s housing crisis turns three this month, if measured by the introduction of the government’s “three red lines” policy, which sought to limit leverage. Throughout, officials have struggled to manage confidence and expectations. At the start, few observers believed Evergrande could collapse, and that the government might fail to put a stop to the pain. Until recently, most thought that Country Garden was immune to default. Since late last year officials have sought to calm the market by drawing up an informal list of healthy developers, including Country Garden, that investors could feel comfortable funding and Chinese citizens could trust. Their calculations have changed in recent days. Country Garden’s issue is not one of over-leverage in the style of Evergrande. Instead, it is a victim of a loss of confidence among regular folk—a sign the government is losing control. After a short rebound following the lifting of covid-19 controls, the property crisis has intensified. Prices are dropping. Sales among the 100 biggest developers fell by 33% in July compared with a year earlier. Country Garden’s tumbled by 60%. The firm’s decline is forcing market-watchers to confront their deepest fears about the property sector.One is that property supply chains collapse. Over the past three years suppliers of materials, along with the engineering and construction firms that build homes, have often not been paid on time by developers. But so far this backbone of the sector has withstood the pressure. That could change as developers grow shorter on funds. The decline in payments to suppliers is already noticeable. Between 2021 and 2022, Country Garden’s transfers to such firms fell from 285bn yuan ($44bn) to 192bn yuan, according to s&p Global, a rating agency. They are all but certain to fall further this year. Although the biggest contracting firms will probably survive with help from the government, it is not hard to imagine widespread collapses among the myriad smaller engineering and materials companies that do the work on the ground. Another concern is that the crisis spreads to state firms. Since 2021 Chinese developers have almost entirely been shut out of international bond markets. But the onshore debt market has remained open to state-backed firms. The large Chinese investors that dominate the market have so far provided a degree of stability; they have not dumped developers’ credit as have asset managers in Hong Kong. Any change would spell trouble. And in recent weeks investors have noted pressure in the domestic bond market. Sino-Ocean, a state-owned developer, has shown signs that it may struggle to repay debts. Homebuyers have chosen state developers because they are seen as safer. If the crisis hits state firms, that notion would be shattered.The fear that the collapse of a developer will bring down a large Chinese bank has mostly been dismissed. Banks’ exposure to developers, analysts say, is reasonable. They would survive even the fall of a firm like Country Garden. But other types of contagion cannot be ignored. If property continues to weaken, the government may ask banks to offer more loans to the industry, says Michael Chang of cgs-cimb Securities, a broker. This would lower returns and also be a poor allocation of credit at a time when China’s economy is suffering. No worry will loom larger in the minds of officials, however, than threats to social stability. Country Garden may have to cut prices to generate sales. This could create competition and lead to swifter price falls across the industry, pushing people to delay home purchases in the hope that prices will fall still further. During past downturns, those who bought homes too early, missing a discount, have protested and demanded a matching reduction in price.Indeed, Country Garden’s biggest creditors are not banks or bond holders, but folk who have paid for homes upfront. Some 668bn yuan, or about half the firm’s liabilities, were put up by homebuyers. Last year thousands stopped paying their mortgages in protest at years-long delays in delivering homes. There is now the threat of much broader protests across the 300 cities in which Country Garden builds.So far officials in Beijing have decided against direct intervention in the property market. Country Garden almost certainly has the $22.5m it needed to cover payments this month. By not coughing up, its bosses are signalling a desire to eventually restructure its debts—perhaps betting that the firm is too big to fail. This puts the central government in an excruciating position. Letting Country Garden fail could lead to wider panic, more economic pain and potentially more defaults, risking contagion and social unrest. Yet stepping in with a rescue package would put officials on the hook for many more bail-outs, and prop up an unsustainable industry. ■ More

Households across China have been thrown into panic over the past week. The company building their flats, Country Garden, missed $22.5m in coupon payments on August 6th. Now the firm, one of the world’s largest homebuilders, has until early September to make the payments or follow hundreds of other developers into default and restructuring. Trading in its bonds, which are worth just pennies on the dollar, was halted on August 14th.Officials across the country are watching closely. Country Garden is renowned for its huge projects in China’s second- and third-tier cities. The firm’s debts are smaller than those of Evergrande, a big, heavily indebted company that defaulted in 2021. But at the start of the year Country Garden was building four times more homes than Evergrande was before it defaulted. At the rate Country Garden was delivering them in the first half of 2022, at least 144,000 buyers will not receive homes they were promised by the end of this year. A sudden debt meltdown at the firm would leave even more families out in the cold.China’s housing crisis turns three this month, if measured by the introduction of the government’s “three red lines” policy, which sought to limit leverage. Throughout, officials have struggled to manage confidence and expectations. At the start, few observers believed Evergrande could collapse, and that the government might fail to put a stop to the pain. Until recently, most thought that Country Garden was immune to default. Since late last year officials have sought to calm the market by drawing up an informal list of healthy developers, including Country Garden, which investors could feel comfortable funding and Chinese citizens could trust. The calculation has changed in recent days. Country Garden’s issue is not one of over-leverage in the style of Evergrande. Instead, it is a victim of a loss of confidence among regular folk—a sign the government is losing control. After a short rebound following the lifting of covid-19 controls, the property crisis has intensified. Prices are dropping. Sales among the 100 biggest developers fell by 33% in July compared with a year earlier. Country Garden’s tumbled by 60%. The firm’s decline is forcing market-watchers to confront their deepest fears about the property sector.One is that property supply chains collapse. Over the past three years suppliers of materials, along with the engineering and construction firms that build homes, have often not been paid on time by developers. But so far this backbone of the sector has withstood the pressure. That could change as developers grow shorter on funds. The decline in payments to suppliers is already noticeable. Between 2021 and 2022, Country Garden’s transfers to such firms fell from 285bn yuan ($44bn) to 192bn yuan, according to s&p Global, a rating agency. They are all but certain to fall further this year. Although the biggest contracting firms will probably survive with help from the government, it is not hard to imagine widespread collapses among the myriad smaller engineering and materials companies that do the work on the ground. Another concern is that the crisis spreads to state firms. Since 2021 Chinese developers have been almost entirely shut out of international bond markets. But the onshore debt market has remained open to state-backed firms. The large Chinese investors that dominate the market have so far provided a degree of stability; they have not dumped developers’ credit as have asset managers in Hong Kong. Any change would spell trouble. And in recent weeks investors have noted pressure in the domestic bond market. Sino-Ocean, a state-owned developer, has shown signs that it may struggle to repay debts. Homebuyers have chosen state developers because they are seen as safer. If the crisis hits state firms, that notion would be shattered.The fear that the collapse of a developer will bring down a large Chinese bank has mostly been dismissed. Banks’ exposure to developers, analysts say, is reasonable. They would survive even the fall of a firm like Country Garden. But other types of contagion cannot be ignored. If property continues to weaken, the government may ask banks to offer more loans to the industry, says Michael Chang of cgs-cimb Securities, a broker. This would lower returns and also be a poor allocation of credit at a time when China’s economy is suffering. No worry will loom larger in the minds of officials, however, than threats to social stability. Country Garden may have to cut prices to generate sales. This could create competition and lead to swifter price falls across the industry, pushing people to delay home purchases in the hope that prices will fall still further. During past downturns, those who bought homes too early, missing a discount, have protested and demanded a matching reduction in price.Indeed, Country Garden’s biggest creditors are not banks or bond holders, but folk who have paid for homes upfront. Some 668bn yuan, or about half the firm’s liabilities, were put up by homebuyers. Last year thousands stopped paying their mortgages in protest at years-long delays in delivering homes. There is now the threat of much broader protests across the 300 cities in which Country Garden builds.So far officials in Beijing have decided against direct intervention in the property market. Country Garden almost certainly has the $22.5m it needed to cover payments this month. By not paying up, its bosses are signalling a desire to eventually restructure its debts—perhaps betting that the firm is too big to fail. This puts the central government in an excruciating position. Letting Country Garden fail could lead to wider panic, more economic pain and potentially more defaults, risking contagion and social unrest. Yet stepping in with a rescue package would put officials on the hook for many more bail-outs, and prop up an unsustainable industry. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More