Stocks lost momentum and turned lower during afternoon trading on Friday as investors retreated somewhat after a powerful rally led by big tech names. The February jobs report showed a rise in the unemployment rate, bolstering investor confidence that the Federal Reserve will cut rates following its June meeting.
The S&P 500 (^GSPC) is near flatline after posting another record high on Thursday, while the Dow Jones Industrial Average (^DJI) rose as much as 0.3%. The tech-heavy Nasdaq Composite ( ^IXIC ) lost 0.3% after sharp gains the previous day.
Friday's nonfarm payrolls report showed the U.S. economy added 275,000 jobs in February, again beating Wall Street expectations. However, the unemployment rate remained at 3.9%, its first increase in four months. Futures on the three major averages traded in the red ahead of the jobs data.
The market got a boost this week after Chairman Jerome Powell told lawmakers that the Federal Reserve is “not far off” from believing inflation is in the right place for the central bank to start cutting borrowing costs.
In a sign of how the wind is blowing elsewhere, European Central Bank policymakers are lining up to support a rate cut ahead of the summer break as inflation falls faster than expected. Meanwhile, Bank of Japan officials are said to be warming to the idea of finally raising rates from negative territory.
On the corporate front, shares of Costco ( COST ) fell 7% as earnings hit after its quarterly sales miss. Broadcom's ( AVGO ) revenue of $10 billion in sales of AI-enabled chips failed to impress investors, sending shares down more than 6%.
Among commodities, gold futures (GC=F) continued to rally as spot gold posted its biggest weekly rise in five months.
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Costco is Costco
Costco (COST) Costco has historically worked well for investors.
The company sells giant $1.50 hot dogs in its food court (and they're pretty tasty, as you can see in my 2022 photo below with retired CEO Craig Jelinek). In the latest quarter, an 18% increase in online sales was fueled by demand for gold bars. A few weeks ago I surprisingly found (and bought) two tomahawk steaks from my local Costco for $40 (about five pounds of meat).
Costco does things differently, and it's built into its DNA. Shares have risen over the past five years as members happily shop: +245%.
So I wasn't surprised to hear Costco's longtime CFO Richard Galanti (soon to retire) reveal his entry into the sushi business on last night's earnings call:
“We recently opened our first fully operational sushi offering in Issaquah, Washington, across the street from our headquarters, and have two more planned to open in the near future. We've been doing this successfully for years. Our sushi program in Asia Costcos and in many countries there is a category that can win both quality and price. It's proven, and we look forward to seeing it in the future.”
Sign me up for the California roll, rich man.
Costco hot dogs are on point. At right, now-retired Costco CEO Craig Jelinek. (Yahoo Fund)
“Friend of animals everywhere. Devoted analyst. Total alcohol scholar. Infuriatingly humble food trailblazer.”