The Week Ahead

– CONSUMER-FOCUSED EARNINGS: On Tuesday, Costco

Wholesale (COST) will report results for its fiscal 4Q23 ended

August 27. Investors will dissect trends in the membership

warehouse club’s average ticket and transaction sizes to gauge

any potential softness in middle income and upper-middle

income U.S. consumer groups. Results from Nike (NKE)

Thursday afternoon and Carnival (CCL) Friday morning should

provide a glimpse into the state of trends in the highly

discretionary categories of premium athletic footwear and

cruise trips. Comments from the two companies on the impact

of recent U.S. dollar strength could be noteworthy given they

both derive at least 30% of their revenue from outside the U.S.

– CORPORATE SPENDING-RELATED EARNINGS: A pair of

quarterly results this week from Cintas (CTAS) and Paychex

(PAYX), both suppliers of key goods and services to small and

medium-sized U.S. businesses, should provide an updated

assessment of underlying momentum in the domestic

economy. CTAS is a leading provider of corporate uniforms,

cleaning services, and safety products to U.S. companies.

Paychex (PAYX) delivers integrated payroll processing and

human resource services to its mostly U.S. business customers.

– THE FED’S PREFERRED INFLATION GAUGE: U.S. personal

consumption expenditure (PCE) price index data for August

will be released Friday morning. The core reading, which

excludes food and energy, is expected to have risen 0.2% last

month and 3.9% from a year ago (compared to July readings of

0.2% and 4.2%, respectively). A year-over-year reading below

4% would represent substantial disinflation from a 40-year high

of 5.4% in February 2022, but still be well above Fed officials'

stated 2% target.

– CHINA FACTORY ACTIVITY DATA: Several manufacturing

sector-focused data releases at the end of the week should

show whether recent stimulus measures implemented by

Beijing have had any success in stoking economic momentum

amid a weaker-than-expected post-COVID recovery in the

world’s second-largest economy.