Alibaba Earnings, Costco Outlook, Dollar Stores: 3 Things to Watch

By Liz Moyer

Investing.com -- Stocks bounced on Wednesday after the Federal Reserve minutes from this month's meeting showed the policymakers were eager to move quickly on rate hikes and leave some breathing room on tightening later in the year.

The comments may have alleviated for now concern that the Fed would act too aggressively and tip the economy into recession. The Fed is sticking to a plan to raise rates by a half-percentage point at its next two meetings starting next month. That is largely what the markets expect, too.

But the minutes also showed the members wanted flexibility to adjust policy down the road depending on how the economy evolves.

On Thursday, the weekly data on jobless claims comes out, and on Friday we get data on income, spending and the personal consumption expenditure index, which is the Fed's preferred inflation gauge.

But the signs are already there that the economy might be cooling off a bit. New home sales fell 17% last month, and retailers have been reporting about consumer spending habits shifting the face of red-hot inflation. The idea that the Fed might have to put the breaks on its tightening efforts was a relief to some market watchers.

Americans are ready to head out for the long Memorial Day holiday weekend on Friday, facing an average $4.599 a gallon price of gasoline, up from $4.123 a gallon just one month ago.

Here are three things that could affect markets tomorrow:

1. Alibaba earnings

The Chinese e-commerce giant Alibaba Group Holdings Ltd ADR (NYSE:BABA) is expected to report earnings per share of $7.16 on revenue of $199 billion, according to analysts tracked by Investing.com.

2. Costco outlook

The warehouse club Costco Wholesale Corp (NASDAQ:COST) is seen reporting EPS of $3.06 on revenue of $51.3 billion. Analysts will be listening for what executives say about inventory levels, consumer demand and costs.

3. Dollar stores

Dollar stores will also be reporting earnings. Dollar General Corporation (NYSE:DG) is seen reporting EPS of $2.33 on revenue of $8.7 billion. Dollar Tree Inc (NASDAQ:DLTR) is seen reporting EPS of $2.01 on revenue of $6.8 billion. Analysts will be listening for signs the lower-income consumer is starting to cut back on spending because of rising inflation, and for updates on how pricing changes affected shopping habits.

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