Target Misses, Market Records, Nvidia Earnings Countdown 05/22/24

Carl Quintanilla (0:00)

Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla, on the opening bell hour of CNBC's Squawk on the Street.

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post 9 of the New York Stock Exchange. David Faber's on assignment. As you see, all time highs here, but futures are a bit cautious ahead of the big event tonight, and that is Nvidia earnings. Meantime, retail earnings are a bit mixed. Target largely fails to impress. Oil now down 2% for the week. A roadmap's gonna begin with Target's big miss. Consumers buy fewer groceries and home goods. Shares are down sharply pre-market. Nvidia shares are coming off a record close and on track for some gains at the open. Expectations are high, though, for the chip maker's results after the bell.

And watch Apple, the midst of a seven-day wind streak with a gain of nearly 13% so far this month.

Let's begin, though, with Target down sharply on this quarterly earnings miss and a sales decline. The retailer did say customers cut their spending on discretionary and grocery. Company did reaffirm full year guidance. Jim, they guided comps down three to five and came in three-seven.

Jim Cramer (1:12)

Yeah, I mean, when you talk to Brian, he'll be insistent that this wasn't anything that you should find unexpected. The thing that I'm struggling with is he talks about the consumer in temperate terms.

Walmart didn't.

Walmart told about a consumer that's in good shape and price rollbacks. We didn't get price rollbacks from Target till this week. So I'm beginning to wonder whether Target is out of position versus Walmart, where Walmart is really starting to, Walmart Plus, represent a bargain. Walmart can also subsidize sales because they've got this terrific advertising business. There may be apples to oranges. Walmart's really spread far afield from Target. Target is to some degree is missing the mark and they have to, maybe they have to up their game a bit, but they may not have the scale of Walmart. So I look at this and I say, geez, it's really sliding in part because it just may not have such special merchandise that it can compete against a really revitalized Walmart. Walmart is just a big game.

Carl Quintanilla (2:23)

Walmart where grocery is 60% and Target's 20%.

Jim Cramer (2:27)

Thank you, because it's grocery. And it's, by the way, it's natural and organic. I think Walmart's giving Whole Foods for a run.

Walmart is under Doug McMillan has become a company that looks a lot like what, like Costco, except for as many more shopkeeping units. Now Costco ports 530 I think they're gonna have a great number. Here's what I think is coming down. We got Amazon, Amazon Prime.

We've got Walmart and we have Costco. It's the big three. Interestingly enough, Rodney McMillan, when he's trying to get this deal done with Albertson, Kroger, he keeps saying that that's who you're up against. I'm calling a big three this morning. There's a big three for food and food drives people.

Carl Quintanilla (3:08)

Costco, Amazon, Walmart. The big three of food.

Jim Cramer (3:13)

And I think that people have to start recognizing. Look, one thing you have to do is you have to go there. I often joke with Walmart. We go to Walmart. Well, maybe because I got a baker and I got a yoga instructor. I mean, you go to where the money is. And if you can go to Walmart and they offer all sorts of, much better set of merchandise than people think, where everything is a little bit cheaper, that's really nipping at Target.

Amazon, because the same day, which they won so badly, if you go over what Jassy's been saying, nipping at Target. And then I got to tell you, Costco, only 3,500 shopkeeping units, but they're so cheap that even, like when you talk to Walmart, they're like, say, yeah, and then there's Costco. Or you go to Amazon, they say, we're not gonna beat Costco. So you've got this big three of really, just like they're the grim reapers of everybody else. And I thought the Target's numbers were just okay. By the way, I struggled yesterday, Lowe's, we had Marvin Ellison. Do it yourself for not doing that much. Home Depot was not that great a quarter. They're catering more to the people who make toll homes.

But I am saying that this may have been a quarter where we recognize there's a separation.

A separation. And Walmart is really, take a look at that stock price and look at their comp stock numbers.

Carl Quintanilla (4:37)

The only thing I would add on Target, Citi points out that we haven't yet hit the steep traffic comps, the declines we saw when they had some of the Pride merchandise.