Good morning. Costco reported yesterday, and comparable sales in its US business were up 7 per cent. That is impressive, but not as impressive as a trip to the Brooklyn Costco on a busy Saturday — overcrowded, polyglot, aggressive and good fun, like the city itself. Email us with your favourite bulk buy, financial or otherwise: [email protected] and [email protected].  

It’s an unforgiving market now

We have rattled on at some length in this space about high stock prices, mostly in the abstract: how high are prices relative to history? How are high prices dispersed through different sectors and countries? And so on. But it is worth looking at the effect of high prices — what they do. We have two good examples this week, in the earnings reports of two huge software companies, Oracle (market cap $500bn) and Adobe ($240bn). 

Oracle reported 9 per cent revenue growth in its second fiscal quarter, but all eyes were on its business selling cloud-based computing infrastructure and software. This business grew 24 per cent in the quarter, and the company set a target of 25-27 per cent growth for the next quarter. This was, as one analyst put it, “merely in line” with Wall Street expectations. The stock fell 8 per cent on the report.