Welcome back after the long holiday weekend. To those of you who have served our country and to those with family members who have sacrificed their time and more to keep democracy alive, thank you.

On to the market:

It felt a bit like dullsville with fewer earnings events last week and the low volume pre-holiday trading. But when the news quiets down a bit, it allows me the bandwidth to find more ideas. I’ve got a few that I’m passing through the last grinder and should be issuing some alerts soon.

In the absence of earnings, the market flip-flopped around on geopolitical turmoil and interest rate fears (or lack thereof). Wednesday’s issuance of the minutes of the last Fed meeting gave investors some hope that the Fed will be cautious regarding rate hikes.

I expect there to be continued churning between industry groups as investors seek out those least exposed to inflationary forces.  Uncertainty regarding the issuance of tariffs and then the postponement or trimming of those tariffs is likely to remain. This ambiguity will make it very difficult for companies to invest in long-term plans and I’m looking for some bearish plays on this thesis.

In the meantime, we finally do have Big Lots (NYSE: BIG) reporting this Friday. 

Around the Portfolio:

AbbVie (NSDQ: ABBV) met the primary endpoint of a late-stage Phase 3 trial for its Impruvica leukemia drug. The study evaluated IMBRUVICA in combination with GAZYVA in previously untreated chronic lymphocytic leukemia or small lymphocytic lymphoma patients, the most common adult leukemia.

Separately, Goldman Sachs analyst Jami Rubin removed AbbVie from the Conviction Buy List. However, the rationale for the removal is not negative. The analyst did so citing share outperformance. Rubin maintained a Buy rating and $135 price target saying it remains one of the more attractive names in the biopharma sector.

Big Lots and Dollar General (NYSE: DG) treaded water last week. The Farm Bill, which is the bill that determines rules for SNAP (food stamp or food assistance programs), hit some turbulence. The President reiterated that he would not sign a bill that doesn’t require a work mandate for recipients and Senate member made it clear they will not approve such a bill.

The stocks will likely be in neutral until Big Lots reports Friday, June 1. Initially, I thought the company might report last week, but due to the holiday weekend, they scheduled the release for before the open this Friday.

The Chemours Company (NYSE: CC) refinanced some of its euro-denominated debt. This move should give income a small boost.  Vertical Research initiated the stock with a buy rating.

Old Dominion Freight (NSDQ: ODFL) was initiated with a Buy at Argus.  Analyst John Staszak gave the stock a price target of $175, saying the company is enjoying high customer retention and market share gains thanks to its “record of 99% on-time deliveries”. The analyst also cites the positive less-than-truckload business fundamentals. He notes the shift to LTL transportation due to tight capacity as a positive and believes Old Dominion will post revenue growth well above that of its competitors ArcBest (ARCB), FedEx Freight (FDX), and YRC Worldwide (YRCW).

Target (NYSE: TGT) dropped due to disappointment over increased e-commerce costs. This unusually high cost has been a common trend with mass merchandisers gaining steam in-home delivery.  The recent introduction of several new Target exclusive brands propelled revenue higher. Comp-store sales rose 3%, right in line with expectations. The culprit to a $.05 earnings miss was profit margins. The lower margins are due to lower sales of toys and hardlines, likely temporary weakness due to the liquidation of Toys R Us stores.

The less transient pressure on margins is the company’s continued investment in e-commerce fulfillment. However, robust traffic, meaning the number of customer visits to the stores, was the best number in TEN years. I still expect that the company’s merchandising efforts in its unique labels will continue to draw customers to the stores.

Management stuck with estimates for the year despite the hiccup in the first quarter. I still like the stock.