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Costco earnings, initial jobless claims: What to know in markets Thursday

Heidi Chung

Ahead of the market open, the U.S. Labor Department will release initial jobless claims data for the week ended Feb. 29. Economists polled by Bloomberg expect the number of Americans filing for unemployment benefits to fall marginally to 215,000 from 219,000 in the prior week.

Thursday’s initial jobless claims follow better-than-expected ADP private sector employment data Wednesday and ahead of the government’s February jobs report scheduled for release Friday.

According to ADP/Moody’s monthly report, private payrolls rose by a 183,000 in February. Consensus expectations were for 170,000 job additions during the month. “The labor market remains firm, as private-sector payrolls continued to expand in February,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “Job creation remained heavily concentrated in large companies, which continue to be the strongest performers.”

Meanwhile, Mark Zandi, Moody’s Analytics chief economist said, “COVID-19 will need to break through the job market firewall if it is to do significant damage to the economy. The firewall has some cracks, but judging by the February employment gain it should be strong enough to weather most scenarios.”

A woman wears a face mask while purchasing bottles of rubbing alcohol at a Costco store in Alhambra, California on February 4, 2020. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)

Big box retailer Costco (COST) will report fiscal second-quarter financial results after the market close. Analysts polled by Bloomberg are expecting the company to report adjusted earnings of $2.06 per share on $38.18 billion in revenue. Same-store sales, a closely-watched metric, will likely have grown 6.4%, and U.S. same-store sales are expected to have jumped 6.5%.

While many businesses are feeling the wrath of the rapidly spreading coronavirus, formally known as COVID-19, Costco is one of the rare companies that has seen a surge in traffic and sales in recent days due to the outbreak.

“It's one of the better positioned retailers to weather any impact from Covid-19,” according to UBS analyst Michael Lasser. “We believe Costco's bulk offerings positions it to be a relative share taker if the outbreak intensifies in the U.S. Even if its in store sales ultimately face some pressure, we believe Costco is well positioned to make up much of this on the back of its recent investments in omni-channel. This includes its nationwide home delivery for non-perishable items, as well as fresh grocery through third-party providers like Instacart.”

Shares of the big box retailer have soared 8% so far this year, while the broader market has tumbled 4% in the same period. The options market is implying about a 6.5% move in either direction for the stock following its earnings announcement.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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