Baker: Costco shines when the economy softens

Consumer Sentiment & Economic Concerns - Prime Day sales are viewed as an early indicator of US consumer health following the shutdown [1][2] - Growing concern around the cost of goods is leading consumers to seek ways to save money [4] - A government shutdown is estimated to negatively impact quarterly GDP by 0.1% per week, raising concerns about consumer spending if workers miss paychecks [9][10][11] Costco's Performance & Strategy - Costco is favored due to softening job markets, as consumers seek value [3][4] - Costco's membership renewal rate of over 90% provides a cushion and profitability tailwind [5] - Consumers may shift to buying in bulk at Costco to save money, even if it requires driving further [8] - Despite a high valuation of approximately 47 times forward earnings, Costco is seen as a way for consumers to stretch their dollars [5][6] AI Investment - The industry advises clients to continue investing broadly in the AI market with a long-term view, considering it's still in the early stages [13][14]