Costco customers don't like change, at least in certain parts of the retailers' warehouse clubs.

While ever-changing merchandise is actually a popular part of why some people shop at the retailer, there are some sacred cows that never change. Member (and company executives) have been fiercely protective of its $1.50 hot dog and soda combination sold at its food courts while the company literally bought a chicken farm to be able to continue selling its famed $4.99 rotisserie chicken.

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Those items are more or less gimmicks. No person, even a Costco loyalist, would flip out if the chain raised the price of the hot dog combo to $2 or if it started charging $5.99 for chicken. Both would remain good deals and while there would be a flood of news stories, the vast majority of members would pay the increased prices without flinching. 

Costco (COST) , however, has made those two price points points of pride that it will lose money to protect, Both of those deals likely drive stories traffic and the chain probably still makes money on the hot dog combo while the chicken serves as a loss leader.

In a broad sense, the hot dog combo serves as a sort of symbolic reminder of how protective the company is of its food court. Items rarely change and when the warehouse club does take something off the menu (or adds something new) it reverberates with members.

Costco brings a food court fan-favorite back

Costco very rarely changes its food court offerings, but it does happen. It recently dropped its churros and replaced them with chocolate chip cookies. It also has replaced its roast beef sandwich with a cheaper turkey sandwich.

During the pandemic, however, the warehouse club stopped selling a true fan favorite its combo pizza. Essentially an "everything" pizza, the once-popular pie had a variety of meat and vegetable toppings.

The removal of the Combo Pizza even led to a Change.org petition.

"Costco’s Combination Pizza is the most popular pizza variant and overall item at the Costco Food Court. It is a delectable combination of meaty goodness and vegetable crunchiness. Unlike a straight pepperoni or cheese pizza, the combo pizza ignites a party of tremendous flavor in the mouths of millions of Costco membership holders," the petition reads.

Over 18,000 people have signed the document which has a stated goal of 25,000 signatures, The petitioners seem very impassioned about the popular pizza.

"Countless Costco members and membership families have sworn to not renew their membership with Costco due to this travesty. Costco must realize that without its members, there would be no profits for them to be concerned about in the first place," the writeup continued.

Costco appears to have listened

While its a tiny fraction of Costco's membership, the people signing the petition likely represent a larger number of the chain's members who miss the Combo Pizza. The retailer appears to have heard their complaints and is bringing the popular item back, but maybe not in the way members want it. 

"According to an alleged employee who took to the popular Costco subreddit, the combo pizza is slated to make its glorious return—but it won't be in the food court. Unfortunately (or fortunately, depending on how you look at it) the pizza will actually be frozen this time around and sold as a take-and-bake option instead," Parade shared.

Members won't be able to eat the pizza at the Costco food court, but they will be able to take it home and bake it in their own ovens. That's a compromise that keeps the food court menu simple and cuts down on waste.

It may not, however, appease the very passionate petitioners.

"The termination of combo pizza from Costco Food Courts nationwide is not only saddening, but total madness, and just straight up WRONG. Costco corporate cites profit and cost concerns, but they could’ve dealt with the issue easily via a price increase. Fans of the combo pizza would have gladly paid the price to continue to enjoy it," the petition filers shared on Change.org.

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Come Monday, the Standard & Poor's Index will increase its number by 1 — Solventum, which will have the ticker SOLV. 

On Tuesday, it will add another stock, this time GE Vernova GEV. 

And on Wednesday two current members of the index, V.F. Corp.  (VFC)  and Dentsply Sirona  (XRAY)  , will move to other S&P indexes. 

In the process, one of the legendary names in American business, General Electric Co.  (GE) , will have become something smaller and, after 132 years, GE will no longer be just GE. 

Related: Goldman Sachs updates when Fed will cut rates in 2024

These aren't the only moves S&P Dow Jones will make. And they're happening because two very large companies — GE and 3M  (MMM)  — have concluded they can operate more efficiently and offer shareholders the potential for larger returns by spinning off some of their businesses.

The spinoffs will three more companies: Fox Factory Holding FOXF, ModivCare MODV and E.W. Scripps SSP.

How the indexes get shuffled

The order of events is this: 

Monday: Solventum, which is the guts of 3Ms healthcare business,  joins the S&P 500 with its spinoff from 3M. Solventum's $8.2 billion in 2023 sales represents about a quarter of 3M's 2023 sales. 3M remains in the S&P 500 and the S&P 100 indexes.

Tuesday: GE Vernova joins the index.  It represents General Electric's portfolio of energy companies — renewable energy, power, and digital. In November 2021, GE announced it would split into three companies. One already has been spun off into GE HealthCare GEHC. What remains of GE will simply be GE Aerospace, but it will keep its GE ticker. It also remains in the S&P 500 and S&P 100 indexes.

Wednesday Part 1: V.F. Corp. and Dentsply Sirona will be removed from the S&P 500. VF Corp will become a component of the S&P Smallcap 600 Index. VF markets outdoor and casual wear. Brands include The North Face, Timberline, and Jansport. Dentsply Sirona will join the S&P Midcap 400 Index. The company is a leading maker of dental equipment and dental health products.

Wednesday Part 2: Fox Factory Holding, maker of products for the auto, off-road vehicle and motorcycle markets, will join V.F. Corp. in moving to the S&P 600. Fox Factory is now in the S&P 400. 

Wednesday Part 3: S&P 600 components ModivCare and EW Scripps will be deleted from the index entirely. ModivCare started as Provident Services Corp. and offers social services and depends on government reimbursements. E.W. Scripps owns television stations and programming and the National Spelling Bee competition. It once was one of the nation's biggest newspaper owners and a major radio-station operator.

S&P Dow Jones, which runs the various S&P and Dow Jones indexes, is making moves, all related to size rules for the indexes, which were modified in January. 

V.F. and Dentsply Sirona no longer have market caps big enough for inclusion in the S&P 500. The current minimum is $15.8 billion. 

To be in the S&P 400 requires a market cap of $5.8 billion to $15.8 billion. For inclusion into the S&P 600, the range is $900 million to $5.8 billion.

The two spinoffs going into the S&P 500 were trading very differently even before the spinoffs are final

3M's big healthcare business 

3M is spinning off Solventum because the parent is so big, and it seemed putting the healthcare business into a new venture would be good for everyone. 3M has struggled with growth issues and staggering costs for environmental remediation.

The health business includes tapes and dressings, electronic monitoring devices, orthodonture products, and surgical supplies.

Solventum started to trade on a when-issued basis on March 26 at $91.05 after opening at $80. It finished Friday at $69.55, down 13.1% from Wednesday's close. 

Based in the company's projected of earnings of $6.10 to $6.40, that would produce a forward P/E ratio of around 11. 

 3M will retain a 19.9% interest in Solventum. It is down 3% on the year but shot up 15.1% in March. 

3M, which sells more than 60,000 products, has a huge product mix. It makes everything from cellophane tape and Post-It Notes to Scotchgard, the water-repellent material applied to fabrics.

GE Vernova boosts its parent 

GE Vernova also was trading on a when-issued basis starting on March 27, opening at $115 and jumping to $131.25. It closed on March 28 at $136.75 — a gain of 18.9%. 

Based on projected earnings before interest, taxes and depreciation, that would imply a forward P/E ratio of 12. 

The company projected 2024 sales at $34 billion-to-$35 billion with 2025 revenue rising by  mid-single digits. Free cash-flow this year was projected at $700 million to $1.1 billion and rising to $1.2 billion to $1.8 billion in 2025.

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Barrons noted that the when-issued performance affected GE as well. Wells Fargo analyst Matthew Akers bumped his target price for GE Aerospace from $177 to $200. 

GE was co-founded in 1892 by Thomas Edison and an original member of the Dow Jones Industrial Average. It  evolved into hugely successful conglomerate by the 1980s and 1990s under the late Jack Welch. 

The stock peaked in 2000 as Welch retired and fell on hard times, needing a Warren Buffett bailout to survive just the after the 2008-09 financial crisis. It struggled until 2018 when Larry Culp, already a director, was asked to be CEO. 

Culp cut spending, and GE paid down more than $100 billion in debt. The company sold businesses that didn't work. 

Then, Culp decided to break the company into smaller pieces. The moves have won him many Wall Street fans and may well make his personal GE holdings worth more than $1 billion. 

The stock is up 37.5.5% this year. It jumped 95.6% in 2023, a better performance than Apple  (AAPL) , Alphabet  (GOOG)  and Microsoft  (MSFT) .   

Why the other stocks aren't as robust

In addition to size and growth issues, the stocks being pushed into less prestigious indexes — or out entirely — have been experiencing challenges of late thanks to the Covid-19 pandemic and other forces. 

The prices of the stocks reflect those struggles. 

• V.F. closed up 1.7% on March 28 at $15.34 but are down 18.4% this year. 
• Dentsply Sirona was up 0.4% to $33.19 but is off 6.7% this year.
• Fox Factory Holding was rose $3.8% to $52.07 but has dropped 22.8% this year.
• ModivCare was down 5.9% to $23.45 and has slid 46.7% this year.
• EW Scripps rose 0.8% to $3.93 but has slumped 50.8% this year. 

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The Federal Reserve has pulled off one of the biggest monetary policy surprises in decades, thanks in part to the lessons it learned from an earlier communications error, and it looks set to deliver on perhaps its most difficult challenge. 

But while some would think this refers to the central bank's chances of executing a so-called soft landing for the world's biggest economy, where inflation is tamed without triggering a recession, the Fed's greater accomplishment is actually even more difficult.

It's slowly convinced markets to align with its interest-rate-cut forecasts while quietly touting the strength of the underlying economy. That's enabled investors to focus on growth and profits over policy, and it has helped power stocks to their best back-to-back quarterly performance in over a decade. 

Friday's PCE inflation report is a great example of the Fed's messaging. It has preached patience as the central bank brings price gains back to its 2% target while reminding investors that its aggressive 2022 rate hikes haven't pounded the economy into submission. 

The Fed's preferred inflation gauge cooled modestly last month, with the closely tracked core reading easing to 2.8%, even as consumer spending popped by nearly twice the level of Wall Street forecasts. 

A patient Fed and surging markets

The PCE reading followed an upwardly revised tally for fourth-quarter GDP, which showed an improved growth rate of 3.4% and inflation pressures that held very close to the Fed's 2% over the final six months of last year.

Jeffery Roach, chief economist for LPL Financial in Charlotte, says the broader spending trend is still weakening. He notes the decline in personal income, but adds that "where we sit today, markets need to have the same patience the Fed is exhibiting."

Related: What's next for the S&P 500 after its best run since 2011

Still, if consumers are spending, inflation is slowing and the economy is growing, Fed rate forecasts might not matter so much and the market's obsession with its messaging to derive its next move will quickly begin to fade.

We've seen evidence of that already, with the S&P 500 rising to a record 5,254.35 points on Thursday to close out a quarterly gain of 10.16%, the best in five years.

The benchmark's advance came amid another call for patience on rates from Federal Reserve Gov. Christopher Waller earlier this week and Fed Chairman Jerome Powell's similarly cautious remarks earlier this month.

Fed's past errors haunt policy

"We’re in a situation where if we ease too much or too soon, we could see inflation come back, and if we ease too late, we could do unnecessary harm to employment and people’s working lives," Powell told reporters in Washington following the Fed's last policy meeting. 

"We want to be careful," he added. "And fortunately, with the economy growing, with the labor market strong, and with inflation coming down, we can approach that question carefully and let the data speak on that." 

The Fed's tone likely reflects the criticism it faced in declaring post-covid inflation pressures "transitory" in early 2021. 

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With the Fed having made that prognosis and repeating it through much of that summer, inflation ultimately accelerated faster than anyone expected and peaked at an annualized rate of 9.1% in summer 2022.

The S&P 500's gains this year have also defined a notable rise in Treasury bond yields, which have adjusted to the Fed's efforts to align markets to its forecast of three rate cuts this year as well as a heftier slate of issuance to fund the government's fiscal ambitions.

Benchmark 10-year Treasury note yields have risen more than 34 basis points (0.34 percentage points) this year, ending the quarter at 4.204%, while 2-year notes gained 37.8 basis points over the same period to 4.628%.

"Another way of looking at the 10-year Treasury yield surge is to consider it a sign of increasing investor confidence," said Trading.biz analyst Rahul Nambiampurath, as investors exit fixed-income investments into riskier assets with higher returns.

It's the economy, stupid

That likely means investors are starting to believe in a U.S. growth story that has lost some of its late-2023 steam but is still on pace to continue adding jobs and power consumer spending as it avoids recession and adds further distance between itself and the rest of the world's major economies. 

Ian Shepherdson of Pantheon Macroeconomics notes that spending on services, the most important growth component, has accelerated to 4.5% over the past three months, the fastest since the post-COVID rebound in 2021.

Any gains in March, he suggests, will bring upward revisions to first-quarter GDP forecasts, which the Atlanta Fed currently pegs at around 2.1%.

Related: The Fed rate decision won't surprise markets. What happens next might

Corporate profits, powered partly by consumers who aren't worried about their jobs and are happy to dip into post-pandemic savings, also carry some solid momentum into the start of the year.

Bill Adams, chief economist for Comerica Bank in Dallas, notes that stripping out losses at the Fed (tied to its $7.7 trillion balance sheet), which are included in the Bureau of Economic Analysis's data, corporate profits rose at an annualized rate of 5.9% over the final three months of last year. 

Rate cuts 'welcome but not needed'

Looking into 2024, Wall Street forecasters see collective S&P 500 profits rising just under 10%, around double the 2023 figure, to an overall average of $243 a share.

"The stock market performed extremely well during the first quarter of 2024, and as long as earnings remain strong, the market can continue to move higher," said Jeremy Straub, chief executive and chief investment officer at Coastal Wealth in Fort Lauderdale, Fla. 

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"While rate cuts from the Fed would be welcome news for stocks, they are not a requirement for a strong market, which has been able to rally for the past 18 months even with high interest rates," he added. "We believe stock investors are adjusting to this new normal of higher interest rates."

So, with bonds likely focused on supply metrics and closely tracking the levels of foreign demand in benchmark auctions and stocks keying on earnings and profit margins, we may be seeing the Fed's influence fade quietly into the background.

Related: Veteran fund manager picks favorite stocks for 2024

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