Last week saw more hawkish commentary from Jerome Powell as he affirmed the latest dot plot from the FOMC that two interest rate hikes were likely ahead for the Fed. This hawkish rhetoric fears that the recent rally in stocks is overdone, and globally rising inflation fears have all led to renewed concerns from some about a coming US recession.

Is this a good time to consider a recession play with Costco? Generally speaking, consumer staples can still gain during recessions as certain basic goods still find buyers, despite the tougher financial conditions.

The seasonals are certainly very impressive. Over the last 15 years, Costco shares have gained 80% of the time between June 26 and August 16 for an average return of 4.68%. Does this mean that Costco is a good summer buy, even if the US heads towards a recession on a more hawkish Fed?

Major Trade Risks: The main risk would be for some specific stock news for Costco that could potentially impact the share price as well as any other major change that could impact stocks.

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