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Today in the Market (8/23/2022)

Good Evening. On Tuesday, stocks ended lower as the market was under pressure from a slew of unfavorable economic reports.

The S&P 500 was down 0.22%, the Dow was down 0.47%, and the Nasdaq was unchanged, dropping 0.27 points, or 0.00%.

MORE EARNINGS

If you are a retailer that sells discretionary clothes like Macy’s (M), brutal earnings warnings are the new good news on Wall Street. Like Kohl’s warning last week, Macy’s comes as the company experiences a problematic quarter as customers cut back on non-essential purchases like clothing due to increasing inflation.

  • Net Sales: $5.6 billion vs. $5.49 billion expected 

  • Gross Margin: 38.9% vs. 39% expected

  • EPS: $1.00 vs. $0.85 expected 

“Despite the difficult climate, we produced strong profits during the second quarter,” according to Jeff Gennette, chairman, and CEO of Macy’s, Inc. “To maintain the health and stability of our business, our teams have continually responded to the dynamic environment with focused, data-driven measures. We think we are in a good position to adapt to shifting consumer behavior.”

However, despite today’s stock increase, Macy’s shares are still down 25% year to date compared to the S&P 500’s 13% decline.

WORK FROM HOME OR RETURN TO THE OFFICE?

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Employees at Apple have started a petition to protest the company’s impending return-to-work deadline. The petition, which had more than 600 signatures as of Monday night, is in response to an internal email that Apple CEO Tim Cook wrote to every employee last week. It stated that employees would be required to report to work at least three days per week starting in early September. The hybrid approach will improve employees’ capacity to “work flexibly,” according to Cook’s memo.

The petition, which was published by a group of Apple employees known as Apple Together, faults Cook’s strategy for failing to take staff diversity or special job requirements into account. Instead, employees should be allowed to collaborate with their immediate managers to create flexible arrangements, according to signatories. According to reports, more than 10,000 Apple employees have joined the “Remote Work Advocacy” Slack channel.

Zooming out… In regards to Return To Office (RTO), other large tech businesses haven’t drawn such firm boundaries. Spotify introduced a self-explanatory “Work from Anywhere” policy last year. A well-known machine learning scientist defected from Apple to Alphabet in May, citing the RTO policy as the main reason.

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