Amazon Earnings – What to Expect
After the close of trading on Thursday, Amazon (AMZN, +1.41%) is expected to report second quarter earnings. All eyes will be on the e-commerce giant especially after Amazon pulled off a successful Prime Day on the 15th of July. Analysts have forecast a loss of 15 cents per share which is better than the 27 cents per share loss reported in the same period a year ago. Also, Amazon is expected to report improved sales from $19.3 billion in the same period a year ago, to $22.4 billion in the 2nd quarter. This is expected to be made up of $15.7 billion in the sale of electronics and other merchandise, $1.5 billion from Amazon Web Services and $4.86 billion from media sales. On Monday, after analysts upgraded Amazon, the company’s shares hit an intraday high and in the last 3 months, the company’s shares have gained 25 percent. We can compare this to the S&P 500 index (SPX) which has only gained 1.4% over the same period. Interestingly, according to Cowen and Company, Amazon has the potential to overtake Macy’s (M, -0.17%) as the leading apparel retailer in the U.S. by 2017. This is as a result of the company’s growing apparel purchasing growth and fulfillment strategies. In addition, investments in Amazon’s technology and retail markets also put the e-commerce giant in line for the No. 1 spot. Analysts at Cowen upgraded the Amazon stock from market perform to outperform, while they also raised the price target from $435 to $565. Amazon shares are currently trading at $480.28 each.
On Monday, U.S. stocks traded higher as the Nasdaq Composite index (COMP) closed at a record high for 3rd straight trading session. By the close of trading, the Nasdaq rose 0.2%, or 8.72 points, at 5,218.86. Also on the upside was the Dow Jones Industrial Average (DJIA) which advanced 0.1%, or 13.96 points, to 18,100.41. Meanwhile, earlier in the session, the S&P 500 index (SPX) traded above its all-time closing high but these gains pulled back by the end of the trading session as a result of losses in the materials and energy sectors and the index closed down 0.1%, or 1.63 points, to 2,128.27. This put the index only 3 points below its all-time closing high. According to a chief market strategist at CMC Markets, Colin Cieszynski, while we have seen stocks rally this week, it is evident that the market is still in a trading range and it has been for the last few months.
On Monday, the U.S. dollar (USD) traded at a 3-month high. This came as investor expectations regarding an increase in interest rates by the Federal Reserve continued to support the greenback. On Friday, data showed that, in June, the consumer price index in the U.S. rose 0.3% while consumer prices also advanced by 0.1% on a yearly basis. In addition, in a separate report, data showed that in June, the housing starts in the U.S. rose 9.8% to 1.174 million units. The EUR/USD traded at 1.0856, up 0.23% while the GBP/USD traded at 1.5572, down 0.19%. Against the Canadian dollar, Japanese yen and the Swiss franc, the U.S. dollar traded higher with the USD/CAD up 0.11% to trade at a 6-year high of 1.2984, the USD/JPY up 0.14% to a 1-month high of 124.22 while the USD/CHF held steady at 0.9619. Also, the U.S. dollar index was at 97.97 which marked the highest level since the 23rd of April.
On Tuesday, crude oil prices declined in early Asian trade. This came as investors now shift their attention to the industry data on U.S. stockpiles expected out today. The API (American Petroleum Institute) is expected to release its estimates of last week’s crude and refined product stocks while the U.S. Department of Energy will release their data on the same tomorrow. WTI crude oil for delivery in September traded at $50.26 a barrel, down 0.37 percent. Also, on Monday, Brent crude oil for delivery in September traded at $56.60 a barrel, down 0.91%, or $0.52, on the Intercontinental Exchange (ICE) in London. During the trading session, the contract moved between $56.45 and $57.44 a barrel.