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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

Amazon Turns Negative For 2021 as Higher Yields

LEO

Oct 26, 2021 10:52

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Amazon.com Inc. shares fell sharply on Monday, with the e-commerce giant falling back into negative territory for the year, as a sustained rise in Treasury yields is hurting the earnings outlook for companies with high valuations. 


The stock fell 2.9% in its sixth straight daily decline, the longest such streak since an eight-day drop that ended in August 2019. With the drop, the stock is now down 2.1% for 2021, making it the only one of Wall Street’s five largest names to be negative for the year. 


Amazon stock  (AMZN) - Get Amazon.com, Inc. Report is worth short of $3,300, nearing the bottom of Wall Street’s recent recommendations rather than the top. Edward Yruma, from KeyBanc, targets AMZN stock at $4,000, while Mark Mahaney, from Evercore ISI, sets his projection at $4,700. Average target price is $4,219 according to the top 30 best performing Wall Street analysts on Tip Ranks.


Solid for the long term


Among the most recent reports on Amazon, stock analyst Edward Yruma has one of the lowest price targets on the shares: $4,000, representing upside potential of 16%. According to Mr. Yruma:


“Amazon is the leading company across retail [and] across technology, but ultimately this is one of these very typical investment cycles for Amazon: it can go on for many quarters and we think ultimately we are not seeing the earnings catalyst we’re looking for to get more constructive on the stock.”


On the other hand, Mark Mahaney has recently raised his fair value estimate to $4,700 from $4,200, implying an upside of 36%. The analyst says:


“It’s pretty much the average multiple the stock has traded for the last couple of years. I do want to throw a warning, though. Amazon is aggressively investing and one of the negative surprises is the outlook of margin declines. If Amazon is ramping on all this distribution capacity, one of the first order impacts could be margin pressure before you get that revenue reacceleration, so I do worry for the near-term”.


Bank of America’s Justin Post is positioned between the two analysts above. The analyst reaffirmed his buy recommendation on Amazon after the announcement that the Seattle-based company is developing its own point-of-sale system, in response to Shopify and PayPal's own solutions for small businesses (SMB).


“The ability for SMB merchants to capture direct online sales, off of marketplaces, is a long-term potential threat to Amazon. So, we expect Amazon to offer a feature rich product with deep integration with Amazon’s marketplace, fulfilment, checkout, and payments processing capabilities (with a possible discount on payments processing).”


The top Wall Street analysts recommend buying Amazon stock, but shares have not gone anywhere in the past couple of months. The Amazon Maven speculates that there are two main reasons why the e-commerce titan is still suffering the consequences of its most recent, ill-received earnings report.


The first is fear of overly optimistic expectations on the digital channel that may still linger from a pandemic-stricken 2020. E-commerce growth may be impacted by COVID-19, especially if consumer demand returns quickly to brick-and-mortar as social restrictions ease further.


Second, macroeconomic worries continue to weigh on the markets. Inflation has pulled back, but supply chain disruption still exists. Yields continue to rise, which tends to be bad news for growth stocks like Amazon.


Amazon rolls out early Black Friday deals to jump-start holiday shopping


Amazon is rolling out “Black Friday-worthy” deals in a bid to hook early holiday shoppers, the company announced Monday.


Amazon said it’s offering “deep discounts across every category,” including fashion, electronics, home goods and toys. New deals will be added to the site daily.


Major retailers have tried to encourage consumers to start their holiday shopping earlier than usual to ensure their gifts are delivered on time. Like Amazon’s early holiday push, Target is launching “deal days” online and in stores Oct. 10-12, the company announced last week.


Holiday forecasts have predicted a sharp jump in year-over-year spending. But retailers also face a litany of challenges this year, from inflationary pressures and supply chain woes to labor shortages. For shoppers, that could lead to more headaches like shipping delays or items that are out of stock more than usual.


Amazon also launched a new feature Monday in its shopping app that allows Prime members to send gifts to friends and family without an address. Instead, users enter a person’s phone number or email address. Recipients are notified when they receive a gift and enter their address. They can also opt to exchange the item for a gift card.


The early Black Friday deals coincide with Amazon’s beauty products event, called “Holiday Beauty Haul,” which kicked off Monday. The company hopes to use the event to draw in shoppers ahead of Black Friday and help boost its position in online beauty sales, which have soared during the coronavirus pandemic.