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Target’s holiday season has become high stakes after the retailer put up three disappointing quarters.
It cut its forecast for the fourth quarter last month.
The big-box retailer is trying to cater to value-minded shoppers with prominent price signs, a holiday price match guarantee and budget-friendly gift items.

Target is stressing value this holiday season, as consumers feel pinched by inflation. At its store in New Jersey, signs that advertise low-priced items are more prominent than in previous years.
Melissa Repko | CNBC

FAIRFIELD, N.J. — Inside of this large store in the suburbs, Target is trying to create some holiday magic for shoppers.
Christmas tunes play over the loudspeaker. Adult- and kid-sized mannequins show off matching family pajamas. Red and green pillows decorate the shelves.

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The big-box retailer is looking for some of its own magic, too. The holiday shopping period has become higher stakes for Target, after it put up disappointing earnings results for three quarters and cut its forecast for the current one. Excess inventory has dragged down the company’s profits, as sales have slowed.
Target is competing in an environment where retailers must work harder to get inflation-weary consumers to spend. Its huge Covid pandemic gains are at risk as middle- and upper-income shoppers spend money on other expenses, such as commuting, vacations, and sending kids to piano lessons and soccer camp. Many already replenished their closets and sprung for big-ticket items like flat-screen TVs, leaving fewer items on the wish list. And even wealthier households are turning to discounters like Walmart, which are known for cheaper groceries.
Other retailers are under pressure, too. Kohl’s, Under Armour and Gap are all navigating the season while looking for new CEOs. Bed Bath & Beyond is trying to revive its business, as it shrinks its store footprint and workforce. Nearly every retailer is trying to get inventory in a cleaner position, while juggling both unwanted goods and more price-sensitive shoppers.
But Target is by far the biggest company of these, with a market value of around $66 billion, and it has a lot on the line. Shares of Target has fallen more than 37% so far this year. That stock slump came after Target in May missed fiscal first-quarter earnings and in June warned it would take a hit to profits as it marked down merchandise.

Target has more than 1,700 toys that are exclusive to its stores and website this holiday season. It also has a deal to sell items from storied toy brand FAO Schwarz.
Melissa Repko | CNBC

Bigger price signs, fresher merchandise

On a recent tour of the Fairfield store, Chief Merchandising Officer Jill Sando pointed out a big sign touting Target’s holiday price match guarantee, displays with bigger price signs and low-priced gifts sprinkled throughout the sales floor, from $5 scrunchies to $20 necklace-and-earrings sets.

“We want to celebrate value,” Sando said. “When we talk about affordable joy, you see the pride in the work. You see the pride in the product. We’re not whispering it. We’re shouting it.”
Target is also trying to cut through the noise of a more promotional holiday season. The big-box player, which has a reputation for cheap chic, has struck exclusive deals with brands and created its own fresh merchandise.
One of those deals is with storied toy brand FAO Schwarz. Another is with Marks & Spencer, a British retailer, which created a line of specialty food items like shortbread cookies in a tin shaped like a London bus and tea bags in a collectible lantern.
And, as shoppers juggle holiday parties and hit stores again, Target wants shoppers’ store visits to be convenient and fun, said Cara Sylvester, chief guest experience officer.
Store associates will rotate displays and ends of aisles to feature unique items, including make-your-own gingerbread house kits and beauty gift sets. She said the goal is to be a “holiday happy place” where shoppers want to stay awhile and fill up their carts.
In the parking lot, Target recently added Starbucks orders to its curbside pickup option, Drive Up. Along with picking up online purchases, shoppers can also get a coffee without leaving the car. It began rolling out the option at 240 stores just ahead of the holidays — with plans to add it to more stores soon.
For customers who have a full calendar of holiday outings and events, it has more mini Ulta Beauty shops inside of its stores, with special holiday gift sets, fragrances, makeup staples and some giftable items for $5 or $10. There are 350 of the shops — up from around 100 a year ago.

A hard problem to shake

But Target doesn’t have the same edge it did during the early years of the pandemic — a time when it stayed open as an essential retailer, became an alternative to the shopping mall and benefited from customers who were flush with stimulus cash.
Weekly store traffic at Target is down when compared on both a year-over-year basis and when compared with pre-pandemic store traffic in 2019, according to data from Placer.ai, which tracks retail foot traffic. It was down 6.1% year over year and down 4.7% versus 2019 for the week of Dec. 5, the most recent data available.
That downward trend has cut across other retailers, including Walmart, Macy’s and Best Buy. It does not capture whether shoppers are spending more or less than previous years.
Michael Baker, a retail analyst at D.A. Davidson, said Target is still haunted by a strategic error — making a big bet on discretionary goods at the wrong time.
Only about 20% of Target’s annual sales come from groceries, according to company filings. Most sales come from apparel, home goods and other discretionary merchandise — the very items that aren’t selling like they did before.
Target wound up with too much of that merchandise, as supply chain clogs eased and inflation soared. It announced an aggressive plan to clear through the glut. Yet on its third-quarter earnings call in November, it shared a new challenge: A sharp slowdown in sales in late October and early November.
Baker said investors hope to see signs Target’s sales are picking up as the holiday rush gains steam.
“If things got worse from there, it raises the question of what’s going on with Target,” he said.
With so much uncertainty, between inflation and the possibility of a recession, Target’s Sylvester said she doesn’t expect the broader economy to be so “rosy” in the coming year. So, she said, Target will keep emphasizing.
During the Fairfield store visit, Sylvester said Target can win with its wide merchandise mix. Shoppers can come for groceries. They can buy inexpensive workout gear from Target’s own brand, All in Motion, as they make New Year’s resolutions. And they can choose from more products in a historically recession-proof category — beauty — as Ulta shops open at more stores, she said.
“How do we double down and bring sort of the joy and the magic of Target to our guests who are going to need it even more?” she said. “Affordable joy shouldn’t just be a holiday thing. That’s all year round.”

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Sustainable Energy

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Hydrogen can be produced in a number of ways, including electrolysis —  where an electric current splits water molecules.
This results in “green” or “renewable” hydrogen, when the electricity used comes from a renewable source, such as wind or solar.
Most current hydrogen generation is based on fossil fuels.

Hydrogen storage tanks photographed in Spain on May 19, 2022. Hydrogen has a diverse range of applications and can be deployed in a wide range of industries.
Angel Garcia | Bloomberg | Getty Images

Hydrogen has a part to play in the U.K.’s shift to a net-zero economy but its role will likely be restricted to certain sectors, according to a report from an influential committee of U.K. lawmakers.
The House of Commons Science and Technology Committee concluded that although hydrogen possessed “several attractive features, most of the evidence we have received was clear that with current technologies, it does not represent a panacea.”

“As the UK looks to transition to a Net Zero economy, hydrogen will likely have specific but limited roles to play across a variety of sectors to decarbonise where other technologies — such as electrification and heat pumps — are not possible, practical, or economic,” the report, which was published Monday, said.
Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a diverse range of applications and can be deployed in a wide range of industries.
One method of producing hydrogen uses electrolysis, a process through which an electric current splits water into oxygen and hydrogen.

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Some call the resulting hydrogen “green” or “renewable” if the electricity used in the electrolysis process comes from a renewable source such as wind or solar. The vast majority of hydrogen generation today is based on fossil fuels.
Monday’s report sought to temper expectations about the role hydrogen could play in slashing emissions and the transition to a net-zero economy.

“To make a large contribution to reducing greenhouse gas emissions in the UK, the production of hydrogen requires significant advances in the economic deployment of CCUS [carbon capture, utilization and storage] and/or the development of a renewable-to-hydrogen capacity,” it said.
“The timing of these is uncertain, and it would be unwise to assume that hydrogen can make a very large contribution to reducing UK greenhouse gas emissions in the short- to medium-term.”
Committee chair Greg Clark said that there were “significant infrastructure challenges associated with converting our energy networks to use hydrogen and uncertainty about when low-carbon hydrogen can be produced at scale at an economical cost.”
“But there are important applications for hydrogen in particular industries so it can be, in the words of one witness to our inquiry, ‘a big niche’,” Clark added.
Industry group Hydrogen Europe did not immediately respond to a CNBC request for comment.
Big plans, big challenges
Over the past few years, major economies and businesses have looked to the emerging green hydrogen sector to decarbonize industries integral to modern life.
During a roundtable discussion at the COP27 climate change summit last month, German Chancellor Olaf Scholz described green hydrogen as “one of the most important technologies for a climate-neutral world.”
“Green hydrogen is the key to decarbonizing our economies, especially for hard-to-electrify sectors such as steel production, the chemical industry, heavy shipping and aviation,” Scholz added, before acknowledging that a significant amount of work was needed for the sector to mature.
“Of course, green hydrogen is still an infant industry, its production is currently too cost-intensive compared to fossil fuels,” he said. “There’s also a ‘chicken and egg’ dilemma of supply and demand where market actors block each other, waiting for the other to move.”
Also appearing on the panel was Christian Bruch, CEO of Siemens Energy. “Hydrogen will be indispensable for the decarbonization of … industry,” he said.
“The question is, for us now, how do we get there in a world which is still driven, in terms of business, by hydrocarbons,” he added. “So it requires an extra effort to make green hydrogen projects … work.” More

Electric vehicle battery startup QuantumScape said it has begun shipping prototypes of its batteries to automotive customers.
It is an important milestone for the startup, but actual commercial production is still at least a few years away.

In this photo illustration the QuantumScape logo is seen on a smartphone and a pc screen.
Pavlo Gonchar | SOPA Images | LightRocket | Getty Images

Electric vehicle battery startup QuantumScape said Tuesday that it has begun shipping prototypes of its batteries to automotive customers, a key milestone  that it had aimed to hit by year-end.
The company’s shares rose in premarket trading immediately following the news.

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QuantumScape said it has begun shipping “A0” samples of its battery cells to its automaker clients. These samples are nearly full-size prototypes that will allow the automakers to test and begin the process of validating the company’s technology for automotive use.
QuantumScape didn’t name the automakers receiving prototypes, but German auto giant Volkswagen is a longtime investor in the company.
The news that QuantumScape is shipping prototypes is an important milestone for the startup, but actual commercial production is still at least a few years away.
QuantumScape has been working for several years to develop a viable “solid-state” battery for electric vehicles. Solid-state batteries are so called because they don’t need the liquid or gel electrolyte found inside existing batteries. A solid-state battery pack can be smaller and lighter than a lithium-ion pack of similar capacity, with much less risk of catching fire.
The technology holds much promise for EVs, but researchers have struggled for years to make a solid-state battery that will hold up over years of recharging. QuantumScape has developed an innovative component – a battery “separator” made of a proprietary flexible ceramic material – that, in lab tests, has given its batteries the ability to survive more than 800 charging cycles.

That’s about the number that an EV’s battery pack would be expected to endure over its lifetime – but scaling up that technology from the laboratory bench to something usable in an EV has been a slow process. Even after today’s milestone, the company isn’t expected to deliver production-ready prototypes to its clients before 2025.
“While this milestone brings us closer to our ultimate goal, there’s still a lot to do before this technology becomes a commercial product, and we now turn our attention to this important work,” CEO Jagdeep Singh said in a statement on Tuesday.
Through Monday’s close, QuantumScape’s shares were down over 73% in 2022.

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KPMG reports automotive executives are less bullish than they were last year about the adoption of electric vehicles.
The survey found 76% are concerned that inflation and high interest rates will adversely affect their business next year.
For the U.S., the median expectation for EV sales was 35% of the new vehicle market by 2030 — down from 65% a year earlier.

A NYC charging station seen in the Yorkville neighborhood of New York City.
Adam Jeffery | CNBC

DETROIT — Global automotive executives are less confident about the rate of adoption of electric vehicles than they were a year ago amid supply chain problems and rising economic concerns, according to a survey released Tuesday.
Of the more than 900 automotive executives who took part in the annual global auto survey by KPMG, the international consulting and accounting firm reports 76% are concerned that inflation and high interest rates will adversely affect their business next year. In just the U.S., the figure was 84%.

Amid those concerns, KPMG reports automotive executives are less bullish about the prevalence of all-electric vehicles in the U.S. and globally by 2030. Estimates of new vehicles sold being EVs by then globally ranged from 10% to 40% in this year’s survey, down from 20% to 70% a year earlier.
For the U.S., the median expectation for EV sales was 35% of the new vehicle market — down from 65% a year earlier and significantly lower than the Biden administration’s 50% goal by 2030 that was announced late last year.
“There’s still a sense of optimism long term, and yet, most importantly, there’s a sense of realism in the near term. You see this realism throughout the entire survey,” Gary Silberg, KPMG global head of automotive, told CNBC.
The declining optimism in EV adoption comes amid stricter requirements for federal incentives for the vehicles; rising concerns about raw materials for batteries; and record vehicle prices. Such concerns are in addition to other supply chain issues and recessionary fears.
“You can be long-term optimistic, but near term, you’ve got to be very realistic,” Silberg said. “It’s not rainbows and butterflies and euphoria anymore, it’s game on.”

Tesla vs. Apple?

Executives who took part in the survey expect Tesla to remain a global leader in EVs but with a far narrower lead.
Perhaps most surprisingly, executives also said they believe tech giant Apple, which has been rumored to be developing a vehicle for years, will be among the market leaders in EVs.

Apple received 133 votes in the survey regarding EV leadership. That’s the fourth-highest number of votes, behind Tesla (223 votes), Audi (206) and BMW (196). Apple had 91 votes a year earlier, despite the company never publicly confirming plans for a vehicle.
Silberg said the sentiment surrounding Apple is based on its brand, experience with mass production and Foxconn, which currently makes its iPhones. The contract manufacturer recently entered the automotive industry and is building an electric pickup in Ohio, with executives expressing plans for further growth in the segment.
Rounding out the top 10 brands after Apple were Ford, Honda, BYD, Hyundai-Kia, Mercedes-Benz and Toyota. An unexpected omission was General Motors. Not one of the automaker’s brands cracked the top 12. That’s despite the automaker investing billions of dollars in the technologies and having a goal to exclusively sell EVs by 2035.
KPMG left the term “leadership” open to interpretation for respondents.

Recessionary fears

KPMG did not use the term recession in its released findings, but Silberg said it is reflected in the economic concerns about inflation and high interest rates.
Such fears are in conjunction with continued supply chain problems for automakers — ranging from EV raw materials to semiconductor chips. In a separate study that involved semiconductors, automotive is seen as the most important sector for driving revenue over the next year. That’s a first in the 18 years of the survey, according to KPMG, which predicts automotive semiconductor revenue will surpass $250 billion by 2040.
Despite the concerns, 83% of automotive executives who took part in the survey globally said they were “confident” in higher profits over the next five years — up from 53% in last year’s results.
In the U.S., 82% of executives said they’re “confident” of profitable growth in the next five years, compared with 67% in 2021.
KPMG conducted the survey of 915 executives in October. More than 200 respondents were CEOs and 209 were other C-level executives. More than 300 respondents were from North America, including 252 from the U.S.

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CNBC’s Jim Cramer on Monday offered investors two stocks they should consider adding to their portfolios.
Stocks in the materials sector tend to be highly cyclical, meaning they could get hammered if the Federal Reserve’s interest rate hikes tip the economy into a recession, he explained.

CNBC’s Jim Cramer on Monday offered investors two stocks they should consider adding to their portfolios.
Stocks in the materials sector tend to be highly cyclical, meaning they could get hammered if the Federal Reserve’s interest rate hikes tip the economy into a recession, he explained. 

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And while it’s far from the best-performing sector in the S&P 500, “even the weakest of these groups have some winners that managed to buck the overall trend and it’s important to figure out if they can keep doing what they did [this year] in 2023,” Cramer said.
Here are his thoughts on his two stock picks:
Corteva

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Cramer recommended that investors buy the seeds and agricultural chemical company stock on its next pullback. He reasons that strong crop prices this year have left farmers flush with cash and more likely to invest in efficient farming.

“Plus, even though the stock’s up 23% for the year, it still sells for less than 19 times next year’s earnings estimates — far from expensive,” he said.

Nucor

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Calling Nucor the “best steelmaker in America,” he said that he’s certain its stock will have an up year in 2023 after it flexed its ability to continue posting solid earnings results despite the Federal Reserve’s tightening. The company will also be a huge beneficiary of the over $1 trillion bipartisan infrastructure bill, Cramer predicted. Shares of Nucor are up over 15% year to date.

“Remember, a year ago the analysts thought Nucor could only make $16 in 2022 and they ended up trouncing those estimates. I wouldn’t be surprised if they put on a repeat performance,” he said.

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CNBC’s Jim Cramer on Monday urged investors to trust Federal Reserve Chairman Jerome Powell in his quest to tamp down inflation.
Cramer reiterated his advice that investors shouldn’t flee the market, and urged them not to expect a repeat of the Great Recession.

CNBC’s Jim Cramer on Monday brought back his mantra from earlier in the year, when the Federal Reserve was still ramping up its aggressive interest rate hike campaign: Trust Chair Jerome Powell to get the job done.
“He’s one of the best central bankers in the world and he’s got a winning hand. Would you please just let him play it,” Cramer said.

Stocks slipped on Monday, continuing last week’s losses driven by recession fears. Investor concerns about a potential economic downturned were renewed last week after the Federal Reserve raised interest rates by 50 basis points and signaled that the expected “terminal rate,” or point at which officials expect to halt rate raises, will be 5.1%. That’s higher than the projected 4.6% in September.
Cramer reiterated his advice that investors shouldn’t flee the market, and urged them not to expect a repeat of the Great Recession, which was spurred by the bursting U.S. housing bubble.  
“That 2008 analogy, it’s bogus. 2022 has very little in common with 2008,” he said, adding, “The consumer’s flush and can handle higher interest rates, even much higher ones. The banks are incredibly well capitalized.”
He also reminded investors that downturns are inevitable for markets in order for the economy to stabilize, echoing his earlier reminder that the Fed won’t go easy on the market in its quest to tamp down prices.
“The sooner we get inflation under control, the less pain we’ll need to experience over the long haul,” he said.

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Electric vehicle maker Lucid Group said it has completed a planned $1.5 billion equity offering.
Lucid raised the majority of that cash via a private sale of nearly 86 million shares to an affiliate of its largest investor, Saudi Arabia’s Public Investment Fund.

Lucid Motors CEO Peter Rawlinson claps after ringing the opening bell at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) begins trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New York City, July 26, 2021.
Andrew Kelly | Reuters

Electric vehicle maker Lucid Group said Monday that it has completed a planned $1.5 billion equity offering. The company first announced the offering in November, when it reported its third-quarter results.
Lucid raised the majority of that cash, about $915 million, via a private sale of nearly 86 million shares to an affiliate of its largest investor, Saudi Arabia’s Public Investment Fund. The remaining $600 million was raised via a traditional secondary stock offering, in which Lucid sold an additional 56 million shares.

The funding round was structured to keep the Saudi public wealth fund’s stake in Lucid at its previous level, about 62%.
Lucid plans to use the proceeds to “further strengthen its balance sheet and liquidity position,” the company said in a statement.
Lucid had about $3.85 billion in cash as of September 30, its most recent report.

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CNBC’s Jim Cramer on Monday said there could be an opportunity to buy stocks ahead of a possible rally.
“The charts, as interpreted by Larry Williams, suggest that Christmas is not going to be canceled for Wall Street,” he said.

CNBC’s Jim Cramer on Monday said there could be an opportunity to buy stocks ahead of a possible rally.
“The charts, as interpreted by Larry Williams, suggest that Christmas is not going to be canceled for Wall Street — he thinks we still have a Santa Claus rally coming, and the ideal time to buy is sometime around this Thursday,” he said.

Stocks fell for a fourth consecutive trading session on Monday, weighed down by mounting recession fears.
Cramer said that the market’s recent downturn is the perfect setup for a Santa Claus rally, which describes U.S. stocks’ tendency to rise near the end of the year and the beginning of the new year. For Williams, it’s a matter of when, not if, stocks will run up, according to Cramer.
To explain Williams’ analysis, he examined the daily chart of the S&P 500 futures from November 2021 to January 2022.

Arrows pointing outwards

The blue line at the bottom is Williams’ seasonal forecast, and suggests the best buying opportunities come in mid-to-late December, with the Santa Claus rally tending to last through January 10. The chart shows that stocks rallied from December 20 through the end of the year, in line with the forecast.
Cramer then compared these findings to the data shown in the daily chart of the S&P futures from September of this year until now.

Arrows pointing outwards

The chart suggests that the market just entered the “seasonal sweet spot,” Cramer said. He added that Thursday’s trading session would be the ideal moment to buy ahead of a potential rally, according to Williams.
“I know it’s hard to believe that the market’s ready to run, but that’s how it always is with Larry’s calls. Although it’s possible this year will be different, historically, betting against him has been a real bad strategy,” he said.
For more analysis, watch Cramer’s full explanation below.

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