Core Insights - American Express is successfully attracting new customers despite raising annual fees on its popular cards, indicating strong demand for its services [1][4] - The company has seen significant growth in net card fee revenue, which increased by 39.2% from 2022 to 2024, compared to a 14.5% increase in merchant fee revenue, suggesting a robust increase in card sign-ups [2] - American Express's business model relies on charging higher merchant fees to offset the costs of generous cardholder rewards, which amounted to $16.6 billion in 2024, nearly double the card fees collected [3][9] Revenue Breakdown - In 2024, card fees generated $8.45 billion, accounting for 16.8% of total revenue, while discount revenue from merchant fees made up 69.8% of total revenue [2][3] - The increase in annual fees for the Platinum Card and Gold Card reflects a strategy to cater to affluent consumers and small businesses [7] Customer Demographics - The fastest-growing demographics for American Express are millennials and Gen Z, with the company adding 13 million new proprietary cards in 2024 [4] - Customer loyalty is a significant competitive advantage for American Express, especially during economic uncertainty [10] Comparison with Competitors - Both American Express and Costco have successfully built loyal customer bases despite charging annual fees for services that have free alternatives [5][6] - American Express's stock has outperformed the S&P 500 over various time frames, indicating strong long-term investment potential [6] Financial Performance - American Express has maintained a low net write-off rate of around 2%, showcasing effective risk management [8] - The company's forward earnings valuation is more attractive at 22.3 times compared to Costco's 47 times, making it a potentially better investment choice [19] Dividend Strategy - American Express has a history of rapidly increasing its dividends, currently yielding 1%, while Costco yields 0.6% but occasionally pays special dividends [20]

Market Overview - The stock market experienced volatility with the S&P 500 and Nasdaq reaching record highs before a three-session losing streak, ultimately closing the week with losses of nearly 1% and just over 1% respectively [1] - Economic data, including a significant drop in weekly jobless claims and an upward revision in GDP for Q2, influenced investor sentiment, leading to concerns about potential interest rate adjustments by the Federal Reserve [1] Nvidia and OpenAI Partnership - Nvidia announced a $100 billion investment in OpenAI to develop AI data centers, prompting analysts to revise earnings outlooks for Nvidia for 2026 [1] - The partnership is seen as an indication of the early stages of the AI trade, with significant growth potential in AI infrastructure [1] Boeing Developments - Boeing's stock rose significantly due to reports of finalizing a large order of jets with China and the FAA easing restrictions on aircraft deliveries [1] - The stock has increased by 25% year-to-date, with expectations for further growth driven by favorable trade policies and international orders [1] Costco's Earnings Report - Costco's stock declined nearly 3% on Friday and almost 4% for the week despite beating earnings and revenue expectations, primarily due to lower same-store sales growth and membership renewal rates [1] - Analysts remain optimistic about Costco's long-term prospects, citing improvements in gross margins and supply chain efficiency [1] Apple Performance - Apple stock was the best performer of the week, rising 4% as positive signs emerged regarding the successful rollout of the new iPhone 17 and Air models, with T-Mobile reporting record iPhone sales [2] - Analysts have raised their price targets for Apple, reflecting confidence in the company's market position and product offerings [2] Nike's Investment Potential - The company initiated a position in Nike, citing a promising turnaround plan under CEO Elliott Hill and potential sales boosts from the upcoming FIFA World Cup [2] - A price target of $80 per share was set, indicating about 16% upside from the recent close [2]

Market Performance - U.S. stocks experienced a rise on Friday, with the S&P 500 increasing by 0.6%, the Dow Jones Industrial Average gaining 299 points (0.7%), and the Nasdaq composite adding 0.4%, helping to reduce weekly losses [1][2] - The S&P 500 closed at 6,643.70, the Dow at 46,247.29, and the Nasdaq at 22,484.07 [8] Inflation and Economic Indicators - Inflation in the U.S. accelerated to 2.7% in August from 2.6% in July, which, while above the Federal Reserve's 2% target, aligned with economists' forecasts [2][3] - Consumer sentiment showed weakness, with a University of Michigan survey indicating frustration with high prices, although inflation expectations for the next 12 months slightly decreased to 4.7% from 4.8% [10][11] Federal Reserve and Interest Rates - The Federal Reserve's potential for continued interest rate cuts is critical for Wall Street, as expectations for these cuts have driven U.S. stocks to record highs since April [3][4] - The Fed recently implemented its first rate cut of the year, but further cuts are uncertain due to concerns about worsening inflation [4] Tariffs and Market Reactions - President Trump's announcement of new tariffs on imports, including pharmaceutical drugs and heavy trucks, has created uncertainty among analysts regarding their ultimate effects on the market [5][6] - Companies like Paccar, Eli Lilly, and Pfizer saw stock increases following the tariff announcement, while home furnishing companies experienced volatility in their stock prices [6][7] International Market Trends - European stock indexes rose after declines in Asia, with France's CAC 40 climbing 1% and South Korea's Kospi dropping 2.5% [9] Upcoming Events - A potential U.S. government shutdown is on the horizon, with a deadline set for next week, but historical data suggests limited impact on the market from such political events [12]

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Shares of Costco Wholesale Corp. were down 2.5% on Friday, making it one of the S&P 500's worst performers for the day, following quarterly results a day earlier that were marked by weaker-than-expect... ...

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Core Insights - Costco revealed its real-estate strategy alongside its fourth-quarter earnings, celebrating significant anniversaries for its hot-dog combo and Kirkland Signature brand [1] - The company continues to expand, opening 10 new warehouses in the fourth quarter and a total of 27 for the year, bringing its global total to 914 [1][2] - Costco plans to open 35 new warehouses in 2026, indicating strong domestic and international growth opportunities [2] Real Estate Ownership - Unlike many retailers, Costco owns the majority of its warehouses, with a real-estate portfolio valued at $31.9 billion [2] - Approximately 80% of Costco's sites are owned, each valued conservatively between $25 million and $35 million [3] - The company’s strategy emphasizes ownership over leasing, allowing it to operate independently of landlords [3] Sales Performance - Costco's "everyday value items" are crucial for customer retention, especially during economic uncertainty, with significant sales figures reported [4] - In 2025, Costco sold over 245 million hot-dog combos and over 157 million rotisserie chickens, showcasing the popularity of its low-priced offerings [4] - The $1.50 hot-dog and soda combo symbolizes Costco's commitment to low prices, with sales growing by over 23% in just over a year [4]

Group 1 - The analyst from D.A. Davidson set a price target of $1,000 for Costco, indicating a potential upside of about 6% from its current stock price of $943.31 [1][5] - Costco concluded its fiscal year 2025 with earnings of $5.87 per share, an 11% increase from the previous year, and revenue of $86.2 billion, reflecting an 8% growth [2][5] - The stock is considered expensive, trading at over 52 times forward earnings, which supports a Hold rating due to its high valuation [3][5] Group 2 - Costco's stock price is currently approximately $918.10, a decrease of about 2.67% from the previous session, with a market capitalization around $407.15 billion [4] - The stock has traded between $905.05 and $933.12 during the day, and over the past year, it reached a high of $1,078.23 and a low of $867.16 [4] - The company is experiencing strong membership growth, increasing digital sales, and global expansion, but faces competitive pressures from Aldi and Walmart [3]

Market Overview - Most U.S. stocks are rising, with the S&P 500 up 0.2% and the Dow Jones Industrial Average increasing by 211 points or 0.5% [3][4] - The Nasdaq composite is down 0.1% due to declines in some major tech stocks, but all three indexes are near their all-time highs [3][4] Inflation and Economic Indicators - Inflation in the U.S. accelerated to 2.7% last month from 2.6% in July, which is above the Federal Reserve's 2% target but aligns with economists' forecasts [4][5] - The Federal Reserve recently cut interest rates for the first time this year, with more cuts anticipated through the end of next year, although there are concerns about the potential impact on inflation [5][6] Tariffs and Market Reactions - President Trump's announcement of new tariffs on imports, including pharmaceuticals and furniture, is expected to influence inflation and market dynamics [7][8] - Companies like Paccar and major pharmaceutical firms saw stock increases, while home furnishing retailers experienced volatility in their stock prices due to potential higher import costs [8][9] Company Performance - Costco Wholesale's stock fell 1.9% despite reporting stronger-than-expected quarterly profits, attributed to slower membership renewal rates and disappointing revenue growth [10] - Consumer sentiment is reported to be weaker than expected, with inflation expectations slightly decreasing from 4.8% to 4.7% [11][12] Broader Market Sentiment - Investors are generally accustomed to political impasses, such as the potential U.S. government shutdown, which historically have limited impact on the market [12][13]

Core Viewpoint - Costco's quarterly earnings and revenue exceeded Wall Street forecasts, yet shares traded 1% lower in pre-market trading [1] Group 1: Earnings Performance - The company reported fiscal fourth-quarter earnings of $5.87 per share, surpassing consensus expectations of $5.81 [1] - Net income rose to $2.61 billion for the quarter ended August 31, compared to $2.35 billion a year earlier [2] Group 2: Revenue and Sales - Revenue came in at $86.16 billion, slightly above analyst estimates of $86.08 billion [2] - Net sales grew 8% year-on-year to $84.4 billion [2] - Excluding fuel, same-store sales increased by 6.4%, just shy of the 6.44% projection [2] Group 3: Market Dynamics - Strong customer traffic and solid sales helped offset higher costs during the period [1]