CNBC Investing Club Backs TJX Comeback as Microsoft, Nvidia Debut AI PC

U.S. stocks dipped from record highs Wednesday as rising interest rates weighed on most of the session. The yield on the 10-year Treasury note touched 5.35%, its highest level since 2002, according to CNBC. Bonds later rallied after solid demand for the Treasury Department's sale of $39 billion in 10-year notes at 1 p.m. ET, which pushed yields lower and helped stocks recover most of their early losses. The next auction to watch is at 1 p.m. ET Thursday, when the U.S. sells $22 billion of 30-year bonds.

TJX shares have bounced from their mid-September low and were trading above $139 on Thursday, up more than 13% from their $122.84 close on Sept. 16, CNBC reported. The off-price retail stock is still down about 8% since it reported earnings in mid-August. Part of that decline was tied to macro concerns about inflationary pressures and interest rates that have affected the entire retail segment. The other part came from company-specific problems in its fiscal 2027 second quarter.

Marmaxx, TJX's largest segment, which includes TJ Maxx and Marshalls, saw comparable sales growth slow to 1%, below the consensus for 3% growth. The company attributed the deceleration to having the wrong mix, or assortment, of in-demand inventory. CNBC noted that it is rare for TJX to have the wrong merchandise, and the slowdown raised concerns about competitive pressure and market-share loss to rival Ross Stores. Ross Stores shares are down about 4% since the day before TJX's August earnings report, underscoring the tough environment for retailers.

Morgan Stanley weighed in on the macro-versus-micro debate Wednesday. Based on its survey work, the firm believes the issues that hurt the second quarter were macro related and not structurally tied to the TJX brand. In the survey, 69% of respondents said cutting back on overall spending was a reason they are spending less at TJ Maxx and Marshalls than a year ago. Another 37% said prices are higher than what they are willing to pay. The survey also showed TJ Maxx and Marshalls remained first and second among off-price retailers in brand perception, ahead of Burlington and Ross Stores' Ross Dress for Less.

The data suggests TJX has not lost its way and that a better consumer backdrop would support an acceleration, according to CNBC's Investing Club. The recent rebound in TJX shares shows the market is feeling that way, the club wrote. If there were significant market-share loss, TJX would lose some of the premium price-to-earnings multiple it has over traditional department stores. Morgan Stanley added a caveat: it thinks TJX is unlikely to see an inflection in third-quarter results because of soft data and is looking at the fourth quarter at the earliest for a comparable sales growth inflection. The analysts reiterated their buy-equivalent rating and said they would use ongoing weakness as a buying opportunity. CNBC's Investing Club agreed but said the difficult macro backdrop of high inflation and interest rates creates a tough near-term setup for retail. It added that off-price retail can grow through these challenges because of the value it offers customers. The club said it has bought the post-earnings dip in TJX on three occasions: Sept. 17, Aug. 26 and Aug. 21.

Separately, the promised Microsoft-Nvidia laptop is here. The Surface Laptop Ultra leverages Microsoft's PC and Windows DNA and Nvidia's new RTX Spark chip, CNBC reported. Earlier this year, when announcing its Arm-based RTX chip, Nvidia said it was working with Microsoft to create the world's first Windows PC purpose-built for personal AI agents. During Wednesday's Microsoft event, company executives showed off the Surface Laptop Ultra. Preorders are now open for the device, which starts at nearly $2,600. Shipping begins on Oct. 16.

In a veiled jab at Apple's stripped-down Macs, the specs on the Surface site boast 'no dongles necessary,' because the new device includes USB-C, USB-A, HDMI ports, as well as a headphone jack and a full SD card reader. The Ultra has a magnetic USB-C port, similar to Apple's MagSafe charging plug. The Surface Laptop Ultra can run AI models on the machine without the high monthly bills of engaging with cloud-based models and agents. Microsoft also announced the Surface RTX Spark Dev Box, a more powerful machine starting at nearly $6,000, designed to give developers what they need to work on AI right out of the box.