Here's how I'd be playing things right now.
The rate of inflation may indeed be coming down, but it is likely to remain at elevated levels for quite some time, and so are interest rates.
The more important question is how far this counter-trend bounce can go even if it isn't a bottom.
My opinion is that TGT is going to be a safer volatility play, more than a directional play.
Inflation is likely to stay above the Fed's target throughout 2023 at the very least.
Plus, trading volume on the Big Board and Nasdaq got turned up to ear-deafening levels on Thursday.
RL appears to be managing rising costs quite effectively, and the market seems to appreciate the guidance.
There was a cornucopia of reasons why investors fled risk assets on Wednesday for the perceived safety of cash.
I believe this divergence between the performance in growth and value stocks is likely to continue, at least until the Fed 'pivots'.
Plus, the Treasury yield spread moved in the wrong direction Tuesday, signaling possible economic hardship ahead.