Week Ahead on Wall Street

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Is Costco Due For a Membership Fee Hike?

Costco (COST) has a cult following. Would a higher membership fee change that? 

Historically, Costco has increased its membership fee just about every six years. And the last time it hiked its fee was in June 2017, more than six years ago. So the company could be overdue for another increase. Investors will keep an ear out on the company’s Tuesday earnings call.

The fairly routine decision could add millions to Costco’s bottom line. Growth hit a mild post-pandemic slump, and net income decreased year-over-year last quarter.  Still, the company’s stock is up more than 22% on the year, and some analysts believe growth could be on the upswing, too — particularly with a potential fee rise on the horizon. 

In the past, Costco membership fee increases have been marginal, increasing only $5 to $10 depending on the plan. Nevertheless, it could make a notable difference — not just to eager shareholders, but to budget-stretched consumers, too.

Economic Data

On Tuesday, the Case Shiller Home Price Index for July is kicking off notable economic data for the week. In June, this 20-city home price index fell by 1.2% from the prior year, marking the third consecutive month of declines. Investors will also watch for a report on the number of new homes sold in August.

On Wednesday, investors get an update on the 30-year fixed-rate mortgage, which stubbornly remains above 7%, as well as durable goods orders for August. In July, new orders for manufactured durable goods in the U.S. dropped by 5.2%.

On Thursday, the Commerce Department will release the final reading of second quarter GDP data, as well as quarterly inflation numbers measured by the PCE. The core PCE price index is the Federal Reserve’s favored inflation measure. The Department of Labor will publish weekly jobless claims.

Finally, Friday will bring some more consumer data with the release of August spending and income metrics, as well as the PCE for August, and the University of Michigan Consumer Sentiment survey for September. This data is key, because consumer spending drives a large portion of the U.S. economy.

Earnings Data

Today, Thor Industries (THO) will kick off earnings for the week by. Investors will expect updates on recent management changes, as well as the RV maker’s partnership extension with the Girl Scouts of America.

On Wednesday, Paychex (PAYX) will keep the action going, and likely discuss the departure of its CFO.Thursday will be the busiest day of the week, with earnings reports coming in from Accenture (ACN), CarMax (KMX), and Nike (NKE).

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