Fourth Week of May 2025

THE WELL-TH NOTES

Weekly data-driven insights on the markets and economy

1. Target takes a tumble

Target cut its full-year sales forecast on Wednesday after a disappointing first quarter, citing weaker discretionary spending, tariff uncertainty, and backlash over changes to its DEI efforts. Comparable sales fell 3.8%, and the company missed Wall Street’s earnings and revenue expectations. In response, Target announced leadership changes and launched a new Enterprise Acceleration Office to streamline operations and reignite growth.^[i]

2. Frames for the future

On Tuesday, Xreal announced Project Aura, a lightweight pair of extended reality (XR) glasses powered by Google’s Android XR operating system and Qualcomm’s Snapdragon XR chips. Aura is the first glasses-format device to run Android XR, following Samsung’s Project Moohan headset. The launch positions Xreal and Google to challenge Meta and Apple in the evolving XR space.^[ii]

3. Home Depot holds firm

Home Depot reaffirmed its full-year sales forecast Tuesday and said it won’t raise prices in response to tariffs, citing its scale, supplier partnerships, and productivity gains. CFO Richard McPhail emphasized the retailer’s diversified sourcing strategy, noting no single country outside the U.S. will account for more than 10% of imports by next year. The pricing stance contrasts with Walmart’s, as Home Depot aims to gain market share despite a sluggish housing market and missed Q1 earnings expectations.^[iii]

4. Levi’s leaves Dockers behind

Levi Strauss announced Tuesday that it will sell Dockers to Authentic Brands Group for $311 million, with Centric Brands assuming operational responsibilities. The deal could bring Levi’s up to $391 million in future earnings based on Dockers’ performance under Authentic, which also owns brands like Reebok and Forever 21.^[iv]

5. Bond blowback

U.S. Treasury yields remained elevated Monday after Moody’s downgraded the U.S. credit rating from Aaa to Aa1, citing rising debt and interest costs. The 30-year yield briefly topped 5%—a level not seen since late 2023—while the 10-year rose to 4.459%, pressuring financial markets. Despite the downgrade, investor bond buying later in the session helped ease yields from their highs.^[v]

6. “Final Destination” franchise reigns

“Final Destination: Bloodlines” opened last weekend to a strong $51 million domestically and $102 million globally, setting a new record for the franchise. The film topped the box office, surpassing Marvel’s “Thunderbolts” and outperforming fellow new release “Hurry Up Tomorrow.” Backed by strong reviews and a 93% Rotten Tomatoes score, the sixth installment marks a successful return for the long-running horror series.^[vi]

^[i] Repko, Melissa. “Target cuts sales outlook as retailer blames tariff uncertainty and backlash to DEI rollback.” CNBC, 21 May 2025, https://www.cnbc.com/2025/05/21/target-tgt-q1-2025-earnings.html. Accessed May 21, 2025.
^[ii] Kharpal, Arjun. “Xreal debuts first glasses to run Google’s Android XR operating system to take on Meta and Apple.” CNBC, 20 May 2025, https://www.cnbc.com/2025/05/20/google-io-xreal-debuts-project-aura-glasses-that-run-google-android-xr-.html. Accessed May 20, 2025.
^[iii] Repko, Melissa. “Home Depot CFO says retailer doesn’t plan to raise prices due to tariffs.” CNBC, 20 May 2025, https://www.cnbc.com/2025/05/20/home-depot-hd-q1-2025-earnings.html. Accessed May 20, 2025.
^[iv] Fonrouge, Gabrielle. “Levi Strauss to sell Dockers to brand management firm Authentic Brands Group.” CNBC, 20 May 2025, https://www.cnbc.com/2025/05/20/levi-sells-dockers-to-authentic-brands-group.html. Accessed May 20, 2025.
^[v] Kailai Han, Lisa and Bhaimiya, Sawdah. “30-year Treasury yield jumps above 5% after Moody’s downgrades U.S. credit rating.” CNBC, 19 May 2025, https://www.cnbc.com/2025/05/19/us-treasury-yields-moodys-downgrades-us-credit-rating.html. Accessed May 19, 2025.
^[vi] Rubin, Rebecca. “‘Final Destination Bloodlines’ Surpasses $100 Million Globally in Opening Weekend.” Variety, 18 May 2025, https://variety.com/2025/film/box-office/final-destination-box-office-global-100-million-milestone-1236402569/. Accessed May 18, 2025.