The assumption was that consumer spending had softened considerably due to angst and uncertainty stemming from the trade wars. Now it appears that Americans mostly went about their business as usual. ...

Economic Growth & Indicators - US economy grew at the fastest pace in nearly two years, driven by consumer spending [1] - GDP revised up to 38%, fueled by consumer and business spending [6] - Durable goods orders increased by 29%, primarily due to airplanes, while computer and computer chip orders decreased [4][5] - Jobless claims fell to 218000 [4] Federal Reserve Policy - Fed Governor Stephen Myron suggests the neutral rate is drifting down, requiring policy adjustment to avoid downside risks [2] - Some Fed members, like Austan Goolsbee, are hesitant to frontload rate cuts given the current economic conditions [6] - Jeff Schmitt views the current policy stance as only slightly restrictive and doesn't advocate for rate cuts, citing high inflation and a largely balanced labor market [7] Trade & Tariffs - Trade good balance shows the effect of tariffs, with a deficit of 855 billion due to a significant decrease in imports (over 4%) in July [5]

Core Insights - Costco Wholesale Corporation is expected to report fourth-quarter revenue of $86.11 billion, an increase from $79.7 billion in the same quarter last year [1] - Analysts predict earnings per share of $5.80, up from $5.15 in the previous year’s fourth quarter [2] - Costco has consistently beaten revenue estimates, achieving this in two consecutive quarters and five out of the last ten quarters [2] Earnings Estimates - Fourth-quarter revenue is projected at $86.11 billion, reflecting a year-over-year increase of approximately 15.3% [1] - Expected earnings per share of $5.80 indicates a year-over-year growth of 12.6% [2] Consumer Behavior and Store Traffic - Costco stores in Northern New Jersey showed significant traffic, outperforming competitors like Amazon Fresh and Walmart [3] - The grocery section was noted as the busiest area, with consumers seeking value amidst anticipated price increases due to tariffs [4] - Overall visits to Costco increased by 3.2% year-over-year in April, May, and June, with a further increase of 5.5% in August [6] Membership and Revenue Streams - Membership fees generated $1.24 billion in the third quarter, up from $1.12 billion the previous year, highlighting the importance of this high-margin revenue [9] - The recent membership fee increase in September 2024 is expected to contribute positively to profitability [9] Operational Improvements - Early openings for executive members have been implemented to improve store operations and customer experience [5] - This strategy has reportedly reduced congestion and improved the flow of visitors, enhancing the overall shopping experience [6] Comparable Sales and Growth - Comparable sales rose by 5.7% year-over-year in the third quarter, with growth observed across the US, Canada, and other international markets [8] - Continued growth in store traffic and new store openings will be critical indicators for future performance [7]

Group 1: Federal Reserve Insights - Fed Chair Jerome Powell's upcoming speech is crucial for understanding the central bank's policy direction following recent rate decisions and market reactions [1][2] - Powell's comments will be analyzed for insights on economic conditions, inflation progress, and potential future rate adjustments [1][2] - The speech may address market dislocations or unintended consequences from recent policy decisions, impacting bond yields, the dollar, and equity sector rotation [1] Group 2: Market Recalibration and Valuations - Investors are recalibrating after the Fed's rate cut decision, focusing on the sustainability of recent market leadership amid concerning technical signals [2][3] - High-flying stocks like IonQ, Oklo, Baidu, and Alibaba have reached extreme valuations, raising concerns about potential corrections [3] - The shift from momentum to fundamentals could create downside pressure for these stocks, leading to broader market rotation into defensive sectors [3] Group 3: Semiconductor Sector Analysis - Micron's earnings report is anticipated to provide insights into memory chip demand across various applications, serving as a bellwether for the semiconductor cycle [4] - Key areas of focus include high-bandwidth memory demand from AI chip manufacturers, DRAM pricing trends, and inventory levels [4] - Micron's guidance on future demand and competition dynamics will be critical for assessing the sustainability of semiconductor investments [4] Group 4: Consumer Spending and Housing Market - Earnings from Costco and housing market data will shed light on consumer spending patterns and residential real estate trends post-Fed rate decision [5][6] - Costco's results will provide insights into membership trends and same-store sales growth, particularly during economic uncertainty [5] - New and existing home sales data will help evaluate the impact of recent rate cuts on housing activity and affordability challenges [5][6] Group 5: Economic Growth and Inflation Data - The Q2 GDP revision and Core PCE Price Index will influence Fed policy expectations and market sector rotation decisions [7] - The GDP revision will offer insights into economic momentum and consumer spending patterns that informed the Fed's recent policy [7] - The Core PCE reading will be scrutinized for evidence of disinflation progress or concerns about price stability, impacting bond yields and sector rotation [7]

Cardboard-box demand is slumping, flashing a potential warning about the health of the American consumer https://t.co/uJckCuRNIz ...

Economic Overview - Canadian GDP data for July and flash estimates for August will provide insights into the economic recovery after a 1.6% contraction from April to June due to the US tariff war [1] - The US economy shows early signs of recovery, with August spending data expected to indicate brisk consumer spending despite tepid income growth [2] Federal Reserve Insights - Fed Chair Jerome Powell indicated a cooling labor market as a reason for the first interest rate cut of the year, while remaining vigilant on inflation amid ongoing tariff impacts [4] - A report is anticipated to show a slower growth rate in the personal consumption expenditures price index, providing the Fed some leeway to address labor market weaknesses [5] Central Bank Activities - Bank of Canada Governor Tiff Macklem will discuss trade upheaval's effects on inflation and rates, while Statistics Canada will release population estimates amid post-pandemic immigration challenges [6] - Several central banks, including those in Sweden, Switzerland, and Hungary, are expected to maintain current rates, while Mexico and Nigeria are likely to implement cuts [7] Global Economic Indicators - Flash purchasing manager indexes (PMIs) in Asia and Europe will be closely monitored, with key readings from Australia and India expected to show service sector momentum [9] - Japan's midweek PMIs and retail sales data will provide insights into household spending, critical for the Bank of Japan's policy discussions [10] China Economic Data - China's August industrial profits will be reported, assessing corporate earnings stability after months of deflationary pressure, with government spending growth slowing [11] Latin America Economic Developments - Brazil's central bank will release minutes from its recent rate-setting meeting, maintaining a key rate of 15% amid high inflation [19] - Mexico is expected to continue its streak of rate cuts, with analysts anticipating a reduction to 7.5% as inflation remains within the central bank's tolerance range [22][23]

Halloween spending in the US is expected to climb to a record $13.1 billion this year despite consumer wariness about tariffs and higher costs of living, according to a survey by the National Retail Federation https://t.co/qiLkUXLZuC ...

Howard Schneider with Reuters. So, um, as you mentioned a minute ago, some margins of the job market would suggest that the slides already happening. Black unemployment rate in August was above 7%.Uh, declining work week, difficulty among co college graduates finding work, high rising youth unemployment. Why do you think a quarter percentage point now is going to arrest that. Well, I I hadn't say that I thought a quarter point would make a huge difference to the economy, but you got to look at the whole pat ...

Group 1 - The Federal Reserve has cut interest rates by a quarter point and anticipates two more cuts within the year [1] - Despite concerns about the economy reflected in consumer sentiment, household finances are reported to be in good shape overall [1] - Consumer spending has slowed but remains resilient, primarily driven by demand from higher-income consumers [2]

Economic Outlook - The Federal Reserve is expected to cut rates by 25 basis points now, with potential for two more cuts by the end of the year, leading to a year-end target for Fed funds at no higher than 3.63% [2][3] - Concerns are raised about the near disappearance of job growth in the US economy, which may necessitate continued rate cuts unless satisfactory job growth resumes [3][10] Consumer Spending and Sentiment - Consumer spending is projected to slow, with expectations of disinflation resuming in early 2026, despite recent reports indicating growth in retail sales for August [4][8] - A significant drop in consumer sentiment was noted, with early September readings from the University of Michigan in the bottom 1.5% of all monthly readings since 1878, indicating increased consumer worry about the future [7][10] Labor Market Dynamics - There is a disconnect between the labor market and consumer sentiment, with consumer spending remaining resilient despite weak job growth readings [10][14] - For consumer spending to remain robust, job growth needs to increase by approximately 100,000 jobs or more per month; otherwise, it may negatively impact consumer spending [14] Holiday Season Expectations - The holiday season is anticipated to be average, with upper-income households likely to perform better, while middle and lower-income households may face spending challenges due to inflation and stagnant income growth [12][13] - The impact of tariffs and price hikes is expected to affect consumer behavior, particularly among households with multiple children who may be more conservative with their holiday spending [12][13]