The S&P 500 (SPY) continued its historic outperformance by closing at a record high on Thursday. Micron (MU) led the charge by posting strong quarterly results. In addition, China vowed to introduce a stimulus to complement its rate cuts. China’s fiscal and monetary policies are likely in response to the U.S. cutting its interest rates by 50 bps.
The Federal Reserve’s latest actions may weaken the U.S. currency. However, other countries may enact similar policies that would neutralize the selling of the U.S. dollar.
Today, watch the Personal Consumption Expenditure Index report. The PCE index is a preferred metric that the Fed relies on to set its rate policies. It excludes volatile food and energy inflation.
In the retail sector, Costco’s (COST) strong Q4 earnings report should send the stock higher in the weeks ahead. Despite premium valuations, COST stock has support at around the $880 – $900 level. In Q4, Costco earned $5.29 a share. Revenue grew by 1.0% Y/Y to $79.69 billion.
In the electronic manufacturing sector, watch Jabil (JBL). JBL stock gained 11.65% on Thursday after reporting a 17.7% Y/Y drop in revenue, to $6.96 billion. It will buy back $1 billion in stock and will cut jobs. This restructuring will cost the firm $150 million to $200 million.
