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Nordstrom's Strategic Shift: Navigating Challenges in the RetailIn the ever-evolving landscape of retail, Nordstrom ( NYSE:JWN ) stands at a pivotal crossroads, grappling with the aftermath of a global pandemic and the shifting tides of consumer behavior. The recent announcement of weaker-than-expected forecasts for 2024 has sent shockwaves through Wall Street, prompting analysts and investors alike to scrutinize the company's strategies for survival in a fiercely competitive market. Amidst concerns of sluggish demand and cautious consumer spending, Nordstrom ( NYSE:JWN ) finds itself facing an uphill battle. Despite delivering strong holiday-quarter sales, the specter of inflation and higher interest rates looms large, casting doubt on the company's ability to stage a robust recovery. With annual revenue projections falling below expectations and profit per share estimates disappointing investors, Nordstrom's ( NYSE:JWN ) performance in the coming year hangs in the balance. Analysts point to several key factors contributing to Nordstrom's challenges. The company's reliance on non-essential items, such as apparel and household goods, leaves it vulnerable to fluctuations in consumer sentiment and economic conditions. Moreover, intensifying competition from online retailers and fast-fashion brands has put pressure on Nordstrom's traditional brick-and-mortar model, necessitating a strategic rethink. In response to these headwinds, Nordstrom ( NYSE:JWN ) is embarking on a bold new direction. Central to its strategy is a concerted effort to revitalize its discount banner Rack, leveraging it as a vehicle for growth in the burgeoning off-price channel. By tapping into the demand for affordable, trend-conscious products, Nordstrom ( NYSE:JWN ) aims to broaden its appeal and capture market share among lower-income consumers. The decision to eschew new full-line stores in favor of expanding Rack's footprint underscores Nordstrom's commitment to adaptability and agility in a rapidly changing industry. By reallocating resources towards areas of growth and opportunity, the company seeks to carve out a niche in the market while mitigating the impact of stiff competition. However, challenges persist on the horizon. Nordstrom must ( NYSE:JWN ) contend with Macy's, its peer in the retail sector, which has opted to pivot towards its luxury brands to court higher-earning clientele. The divergence in strategy highlights the divergent paths taken by retailers grappling with similar market forces, underscoring the complexity of the retail landscape. As Nordstrom ( NYSE:JWN ) charts its course for the future, the road ahead remains fraught with uncertainty. Yet, amidst the turbulence, opportunities abound for those willing to embrace change and innovation. With a steadfast commitment to adaptation and a keen eye on emerging trends, Nordstrom stands poised to weather the storm and emerge stronger on the other side.
NYSE:JWNLong
by DEXWireNews
Euro climbs to 3-week highThe euro is red hot, having gained close to 2% in just two days. EUR/USD is trading at 1.0144, up 0.97% on the day. The ECB showed last week that its hawkishness was not limited to words, as the central bank delivered a massive 0.75% rate hike, for only the second time in its history. The markets are paying attention, and the move has triggered an impressive rally by the euro. The ECB sent a powerful message that it is committed to curbing inflation by raising rates, even at the risk of a recession. President Christine Lagarde said at the meeting that she expected three or four more hikes, and the markets have priced in 0.50% increases at the October and December meetings. The economic outlook in the eurozone remains grim, with PMIs pointing to weakness in manufacturing and business activity. Russia has shut down the Nord Stream 1 pipeline which supplies gas to Germany, raising fears that the eurozone countries could face an energy shortage this winter. It should not come as a surprise that confidence levels are weak. The ZEW Economic Sentiment index remains mired in a deep freeze, and slowed to -60.0 in July, down from -55.5 in September. Has US inflation peaked? We'll get a look at US CPI for August, with the markets expecting inflation to fall to 8.1%, down from 8.5% in July. Following the unexpected drop in July's inflation release, market exuberance that the Fed would make a U-turn on its aggressive tightening sent the equity markets up and the US dollar sharply. The Fed has remained consistent with its stance and the markets appear to have internalized that the tightening cycle has some more room to run. The markets have priced in a 75 basis point hike at the meeting on September 21st. Tuesday's inflation report will be doubly important, as it marks the final economic release before tomorrow's meeting. If inflation hits 8.1% or higher, it would likely cement a 75bp move by the Federal Reserve. EUR/USD has support at 1.0107 and 1.0008 There is resistance at 1.0152 and 1.0257
by OANDA
AUD/USD edges lower ahead of RBA decisionThe Australian dollar has started the week with slight losses. In the North American session, AUD/USD is trading at 0.6798, down 0.19%. The Reserve Bank of Australia meets on Tuesday, with investors unclear as to the size of the next rate move. The markets have priced in a 50 basis point move at 68%, with a modest 25 bp increase at 32%. This means that the RBA will likely deliver a fourth straight rate 50bp rate hike, which would bring the cash rate to 2.35%. The RBA has been waging a battle against rising inflation, which rose to 6.1% in Q2, up from 5.1% in Q1. At the July meeting, the Australian dollar lost ground despite a 0.50% rate hike, and this could be repeated on Tuesday, especially if the RBA opts for a small 0.25% hike. The central bank has its hands full with rising inflation and a slowing economy. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. Following the RBA decision, Australia releases GDP for the second quarter. The market consensus stands at 3.5%, which would be an improvement on the 3.3% gain in Q1. Australia recorded a record trade surplus of $A45 billion in Q2, and this should be reflected in a higher GDP. The Aussie remains constrained by weak risk appetite, as the energy crisis in Europe took a turn for the worse on the weekend. The Nord Stream 1 pipeline, which is the main conduit for Russian gas to Europe, failed to reopen on Saturday after three days of maintenance. Russia has now closed the pipeline indefinitely, citing a malfunctioning turbine. Germany is skeptical, to put it mildly, and fears are rising that Moscow is again weaponising energy exports to Europe, which could result in a full-blown energy shortage this winter. AUD/USD faces resistance at 0.6846 and 0.6922 There is support at 0.6737 and 0.6661
by OANDA
Euro rebounds after sharp losses, NFP nextThe euro is in positive territory today after taking a nasty spill on Thursday. In the European session, EUR/USD is trading at 0.9984, up 0.40%. Thursday was a day to file away and move on for the euro, as EUR/USD tumbled 1.07%. The euro is under pressure from a high-flying US dollar and is having trouble staying above the symbolic parity line. A combination of solid US numbers, weak eurozone data and lower risk sentiment sent the euro sharply lower. German Manufacturing PMI dipped to 49.1, down from 49.3 in July. This marked a second straight contraction, and was the lowest level since May 2020, at the start of the Covid pandemic. It was a similar story for the eurozone Manufacturing PMI, which dropped from 49.8 to 49.6, a 26-month low. The manufacturing sector continues to struggle with supply chain disruptions and a shortage of workers, and high inflation and an uncertain economic outlook are only exacerbating matters. In the US, the ISM Manufacturing PMI held steady at 52.8, showing modest expansion. The labour market remains strong, with initial jobless claims dropping to 232 thousand, down from 237 thousand a week earlier and much better than the consensus of 248 thousand. Adding to the euro's woes is the uncertainty over European energy supplies from Russia. Russia has shut down Nord Stream 1 pipeline for three days for maintenance, but Germany has charged that the shutdown is politically motivated and that the pipeline is "fully operational". Nord Stream is supposed to come back online on Saturday. Even if Moscow does restore service, this episode is a reminder of Europe's energy dependence on an unreliable Russia. Germany has greatly reduced its dependence on Russian gas, from 55% in February to just 26%, but a cutoff from Moscow would result in a shortage this winter. The week wraps up with the August nonfarm payrolls report. The consensus is for a strong gain of 300 thousand, after the unexpected massive gain of 528 thousand in July. The report could well be a market-mover for the US dollar. The markets are finally listening to the Fed's hawkish message, and a strong reading will raise expectations of a 0.75% hike in September and likely push the dollar higher. Conversely, a weak report would complicate the Fed's plans and raise the likelihood of a 0.50% hike, which could result in the dollar losing ground after the NFP release. EUR/USD is testing resistance at 0.9985. Above, there is resistance at 1.0068 There is support at 0.9880 and 0.9797
by OANDA
Euro inflation rises, but euro yawnsThe euro continues to have a calm week. In the North American session, EUR/USD is showing little movement as it trades a whisker above the parity line. Inflation in the eurozone continues to move higher. In August, CPI rose to 9.1%, up from the July gain of 8.9%, which was a record high. Core inflation climbed to 4.3%, up from 4.0%. With both the headline and core readings exceeding the forecast of 9.0% and 4.1%, respectively, there will be additional pressure on the ECB to tighten policy more at an accelerated pace. The central bank has been slow to shift its accommodative policy, which was in place for years in order to support the eurozone economy. The ECB now finds itself playing catch-up with inflation, and is also far behind in the tightening cycle compared to other major central banks, with a benchmark rate of just 0.50%. Inflationary pressures remain broad-based, which means inflation is well-supported and unlikely to decline anytime soon. The eurozone inflation report comes just a day after Germany, the largest economy in the bloc, reported that August inflation jumped to 7.9%, up from 7.5% in July and nudging above the forecast of 7.8%. The central bank meets next on September 8th, and there is a strong possibility that the ECB could come out with guns blazing and deliver a super-size 75 basis point increase. A potential energy crisis in Europe continues to hover like a dark cloud, and the uncertainty over whether Moscow will weaponise energy exports remains a massive concern. The Nord Stream 1 pipeline has been shuttered for a scheduled three-day maintenance, but there are fears that Russia will find some excuse and not renew gas flows on Saturday. Any disruptions would likely push European gas prices even higher. In the meantime, the waiting game is on, with Western Europe on edge while it anxiously waits for the gas taps to be turned back on. EUR/USD has support at 0.9985 and 0.9880 1.0068 is a weak resistance line, followed by 1.0173
by OANDA
Euro slides on Nordstrom squeezeThe euro has taken a nasty tumble today. In the North American session, EUR/USD is trading at 1.0144, down 0.76%. The energy crisis surrounding Nord Stream 1, a key channel for Russian gas exports to Europe continues to simmer. Perhaps the pipeline should be referred to as 'Nord Brook 1', after Gazprom, the Russian energy giant, warned it will cut flows through the pipeline to just 20% of capacity starting Wednesday, claiming "technical issues". The EU has charged that the move is politically motivated, but Vladimir Putin is holding the better hand of cards and has no compunction about weaponising energy exports to the West. The EU has scrambled to scale back its energy dependence on Moscow and announced today that member states had agreed on a voluntary reduction of 15% in natural gas imports. The deal was reached at lightning speed, reflecting the tremendous apprehension in Brussels about an energy crisis this winter. Still, the agreement has apparently been watered down, with exemptions for members that are not directly linked to EU gas pipelines and are completely dependent on Russia. The latest squeeze on Nord Stream 1 has unnerved investors and sent the euro sharply lower. With the war in Ukraine dragging on and a potential energy crisis looming, it's no surprise that German confidence indicators are under pressure. Ifo Business Sentiment slipped to 88.6 in June, down from 92.2 in May. The soft reading was accompanied by a warning from the Ifo Institute, which warned of a looming recession in Germany, due to soaring energy prices and the possibility of a gas shortage in Europe's largest economy. On Wednesday, Germany releases GfK Consumer Climate, which is expected to fall to -28.9 in August, down from -27.4 in July. The index has been steadily weakening and has been mired in negative territory since October 2021. All eyes will be on the Federal Reserve on Wednesday, with a live meeting that will include a supersize rate hike. The markets are expecting a 75bp increase for a second straight meeting, but a massive 100bp hike cannot be ruled out. A 75bp move could be met with a yawn by the US dollar, while a 100bp increase would be a surprise and likely boost the greenback. EUR/USD continues to test support at 1.0191.  The next support level is 1.0105 There is resistance at 1.0304 and 1.0390
by OANDA
Euro soars but Nord Stream could spell troubleThe US dollar remains in correction mode and the euro has jumped on the bandwagon. EUR/USD is trading at 1.0231, up 0.88%. The euro breached the symbolic parity line late on Thursday, the first time that has happened in 20 years. EUR/USD dropped a bit further but has rebounded nicely since then and climbed about 250 points. A better-than-expected US retail sales on Friday provided cheer to the equity markets and risk sentiment has remained strong, pushing the safe-haven dollar lower. The ECB meets on Thursday, a highly-anticipated event in which the central bank will raise interest rates for the first time in a decade. The meeting will be live, with the markets still trying to determine if policy makers will opt for a modest 25bp hike or a more substantial 50bp move. With the benchmark rate at -0.50% and inflation continuing to accelerate, the ECB finds itself lagging well behind the inflation curve and additional hikes are expected in the coming months. ECB Governor Lagarde has made a hawkish pivot in recent months, but whether that will translate into a 50bp increase remains uncertain. Another key event on Thursday is whether the Nord Stream 1 pipeline, which provides Russian natural gas to the European market, will reopen. The pipeline has gone through a 2-week maintenance break, and the gas is supposed to flow, but Moscow has weaponised energy exports previously and could decide to do so yet again. They were reports today that the pipeline will resume activity on Thursday, but a report in the Wall Street Journal quoted EU Budget Commissioner Johannes Hahn as stating that he did not expect Nord Stream 1 to restart on time. If Moscow refuses to turn on the gas tap, the spectre of the EU scrambling for gas supplies could unnerve the markets and send the euro lower. EUR/USD is testing support resistance at 1.0197. Above, there is resistance at 1.0307 The pair has support at 1.0124 and 1.0075
by OANDA