Amazon Earnings & Consumer Spending:
- Cracks have started to show in the global economy, as reflected in Caterpillar’s quarterly earnings[1]
- In the United States specifically, consumer spending is crucial for the continued growth of the economy
- After retail spending data disappointed last month, investors have begun to question the appetite of the American consumer ahead of the holidays
Amazon Earnings and Consumer Appetite, Will Trade Wars Steal Christmas?
The health and appetite of the American consumer has been called into question after September’s retail sales data[2] fell beneath market expectations. As a key driver of the US economy, an ailing US consumer would seriously undermine a bullish argument for the Dow Jones[3], Nasdaq[4] and S&P 500 alike – particularly as the nation heads into the holiday season. Thankfully, quarterly earnings from Amazon are due to be released Thursday afternoon, which could offer a more granular look at the developing trends in consumer spending.
Source: Bloomberg
To that end, Amazon’s implied volatility has ticked higher ahead of the results. While Amazon shareholders may discount the company’s ability to offer insight on the broader economy in favor of the stock’s price reaction and their portfolios performance, implications on broader consumer trends cannot be understated. Although earnings season is in its early stages, the market has already seen a string of corporations highlight waning demand and higher prices due to the US-China trade war.
This week alone, Harley Davidson, Caterpillar, and Hasbro have issued warning statements[5] regarding future profits. In the case of Hasbro, the company explicitly stated the higher costs associated with tariffs would be passed on to consumers, a concerning development for a toymaker ahead of Black Friday and Christmas. In accordance with the basic
