Supermarkets soar, the economy's obesity problem and a jobs preview
After two days in the red stocks are ticking higher in the first half of the session after the European Central Bank completed their monthly meeting and outlined plans for their €1 trillion bond buying program.
Two names drafting off that strong market, and some strong data of their own, are Costco (COST) and Kroger’s (KR) both of which reported earnings earlier today.
At Costco Q4 earnings were up 29% year over year and they reported $1.35 EPS versus the $1.18 analysts had estimated.
“Gasoline was a big piece of why Costco beat,” notes Yahoo Finance Senior Columnist Michael Santoli. “Margins were helped by the fact that wholesale gas prices were down more than retail.” Santoli also points out that Costco is in fact one of the nations largest gasoline retailers.
In addition, he says, “the higher end consumer which really does shop at Costco is doing pretty well and is spending a little more.”
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Over at Kroger, the biggest grocer in the country sports a stock chart Santoli calls “one of the more beautiful charts in all consumer [names].”
He says Kroger's success is tied to the company's strategy in competing with the likes of Whole Foods (WFM) for higher end consumers, a game they are winning.
Jobs report preview
The Bureau of Labor Statistics will release the February jobs report tomorrow morning at 8:30am ET. Yahoo Finance’s Rick Newman is keeping an eye on some key industries and data points to get a real sense of the health of the workforce.
“Job declines in the energy sector,” is one warning sign Newman is keeping an eye on. In addition he says cuts at some big name employers like Radio Shack, Target (TGT), and American Express (AXP) could put pressure on the high level of job growth we have seen over the past few months.
Big bank stress tests
Later this afternoon the results of the Federal Reserve’s stress tests of some of the nation’s biggest banks will be released. The tests, aimed at gauging the health of the country’s financial backbone have served an important role in the post-crisis recovery, but are they still relevant now that we seem to be largely out of the woods? “I think the expectation is the big banks will pass the stress tests and there’s half an eye on them, but the real focus is on rates when it comes to the banks,” says Yahoo Finance’s Aaron Task.
He admits however at one bank, Citigroup (C), there may be a little extra attention paid to today’s results. “Michael Corbett, CEO of Citigroup says if we fail again - and they’ve failed twice in the last couple years - he’ s going to step down.”
Obesity and the economy
A new report by Bloomberg suggests the growing waistlines of many Americans are having an impact, not just on health care but the broader U.S. economy as well. Overweight Americans on average are less productive, take more sick days or work from home more often.
Our Rick Newman doesn’t disagree with such data but says the problem comes “when you start putting price tags on all this. I sometime think that if you added up everything that costs the economy money it would add up to more than the whole economy.”
The real problem, Newman says, is that we have no solution to the obesity epidemic.
On the flip side, obesity is big business.
“There’s a lot of people out there selling all kinds of weight loss supplements and diet plans and exercise regimes all aimed at getting us in better shape,” Task says though he thinks it’s still a net drag on the economy due to health care costs.
Spocking the Canadian $5 bill
And finally the Canadian government is asking its citizens to stop defacing the country’s five dollar bills. After the death of beloved actor Leonard Nimoy last week, fans saw a resemblance between Sir Wilfrid Laurier - the country’s seventh prime minister - and Nimoy’s well known character, Mr. Spock.
While it is not illegal to alter / deface currency in Canada, the country’s central bank has outlined reasons why it shouldn’t be done regardless of the letter of the law:
...there are important reasons why it should not be done. Writing on a bank note may interfere with the security features and reduces its lifespan. Markings on a note may also prevent it from being accepted in a transaction. Furthermore, the Bank of Canada feels that writing and markings on bank notes are inappropriate as they are a symbol of our country and a source of national pride.
