The ‘Everyone Wins’ Stock Market Is Dead — Ask Target

Target Corp.’s sales slump last quarter marked the latest example of supposed softening in US consumption, making some stock-market investors jittery that recession could still be in the cards. But the slight moderation in demand — together with increased competition among firms — may be just what policymakers need to vanquish inflation and set the stage for more sustainable growth.

With about 97.1% of companies by market cap reporting, S&P 500 earnings per share are up about 5.9% in the first quarter from a year earlier on revenue growth of about 4.3% — a plainly positive result overall. Yet companies seem to be competing more for the same pool of top-line growth, a development that ultimately benefits consumers and demands that investors get more discerning.

Just 296 of the S&P 500 companies grew sales from a year earlier, which marks some of the weakest sales breadth since 2020, according to Bloomberg Intelligence data. But those numbers aren’t terrible or recessionary from a historic standpoint; they’re just not consistent with the “everyone wins” stock market we’d gotten used to. Even within the same industries and product categories, some firms are doing much better than others at catering to shifting tastes, marketing and selectively discounting to capture market share.