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3 Things to Watch in the Stock Market This Week

Stocks ticked lower during calm trading last week, which was shortened by the Christmas holiday. The minor decline still left investors staring at significant gains in 2017. For the full calendar year, the Dow Jones Industrial Average (DJINDICES: ^DJI) rose by over 25%, while the S&P 500 (SNPINDEX: ^GSPC) logged a 20% jump.

^SPX Chart

Several big-name earnings reports are on tap for the first trading week of 2018, including announcements from PriceSmart (NASDAQ: PSMT), Sonic (NASDAQ: SONC), and Constellation Brands (NYSE: STZ). Let's look at a few key trends investors will be watching for in these results.

PriceSmart's Colombian business

International warehouse club PriceSmart kicks off its fiscal 2018 by posting results after the market closes on Thursday. The retailer's last quarterly outing didn't give investors much good news to celebrate, and that stumble helps explain why the stock underperformed the market in 2017.

The quarter was marked by steady, but unspectacular, growth as comparable-store sales held to a 2% rate. U.S.-based peer Costco, in comparison, grew comps by 8% in its latest quarter. While a healing Colombian economy lifted PriceSmart's results, those gains were mostly offset by contractions in other markets, particularly Trinidad.

PriceSmart's latest operating figures should be a bit stronger. Comps for the month of November, which includes the start of the critical holiday shopping season, improved by nearly 3%, the company said in early December.

Investors will be looking for that growth uptick to come paired with membership gains and healthy renewal rates. PriceSmart's long-term outlook depends on its ability to expand beyond its small footprint of just 40 warehouses spread across Latin America and the Caribbean. But short-term results can often be rocked by instability in one or more of its major markets, so shareholders must be prepared for volatility as areas like Trinidad, Colombia, and Jamaica turn in varied levels of economic growth.

Sonic's customer traffic

Sonic posts its results on Thursday afternoon. The country's biggest drive-in restaurant chain is hoping to turn the page from a disappointing fiscal 2017, during which revenue declined 3.3%. "Sales were slower than we would have liked," CEO Cliff Hudson told investors in mid-October after the fast-food chain posted surprisingly soft fourth-quarter revenue, while blaming intense competitive activity with reducing its customer traffic. Industry leader McDonald's, on the other hand, grew comps by 6% in the same period.