Amazon has grown from a small tech company failing to establish any earnings to a retail giant and recently, a fierce cloud computing competitor leading the market share. Amazon had 17,000 employees in 2007 only to grow to 230,800 in 2015. Just recently Amazon announced that they intend to hire 120,000 part-time workers for the holiday season. To put things into perspective, there were approximately 205,000 unemployment claims last week. Other retailers are bleeding and have fallen in market cap by the billions. Macy’s, Target, and Kohl’s are not doing any extra hiring and employment levels have stayed flat. Amazon is expecting extremely high earnings from this year’s holiday season. In 2016, Amazon’s revenue was 46% higher than the previous quarter’s in 2015. This is a herculean feat by the tech company.
Amazon is winning on multiple levels as the company is the largest retailer in the world. Their advanced technological infrastructure allows them to ship and maintain logistics to the lowest cost. They are not just a company that sells books anymore, but one that competes with shipping companies, brick-and-mortar stores, software developers, and cloud computing companies. Amazon’s success has added to Jeff Bezo’s empire to make him the third wealthiest person in the world and lets him focus on other ventures such as Blue Origin. Walmart is trying to compete with Amazon’s online presence by recently buying competitor Jet.com. The company went live about a year ago and was bought for $3.3 billion in cash. Jet may add a new face to Walmart’s online presence combined with their supply chain analytics to make for a real threat to Amazon and others, including Overstock and Alibaba.
Unemployment has had a recent uptick in September compared to the past three months, moving from 4.9% to 5.0%. This also compares to an all-time low in May at 4.7%. Job reports have had great influence on the Fed’s decision on whether or not to raise rates as slowing economic numbers are cornering the Fed into a decision not to rush the economy. Yellen has also received harsh criticism for acting politically and not maintaining the credibility of the Fed’s word. Among instability from the Fed and employment numbers is the political climate. With re-election for certain House members, industries such as financials and pharmaceuticals seem increasingly threatened by suffocating regulation. Some senators have called for a streamlined process starting from the Fed, while others claim top executives are often too greedy. Mylan and Wells Fargo were recently victims in fines and negative PR. Both stocks are down, with Mylan losing nearly $10 billion in market capitalization. With a new figure at the executive level, analysts are concerned with trade regulation possibly led by Trump or the signing of TPP by Clinton. If it’s one thing investors and traders do not like, it’s uncertainty. The following months will leave options traders facing even greater risk. It is important to stay vigilant and as Buffett puts it, “Be fearful when others are greedy.”