Connect with us

Economics

It’s Coming – A Huge Bond Buying Opportunity

It’s Coming… A Huge Bond Buying Opportunity

Published

on

This article was originally published by ZeroHedge.

It's Coming... A Huge Bond Buying Opportunity Tyler Durden Tue, 10/27/2020 - 08:25
Authored by Lance Roberts via RealInvestmentAdvice.com, Here we go again. After plunging to new lows, the calls for the end of the “bond bull” market mount each time rates rise. Is this time the end of the “bond bull?” Or, is there another huge bond-buying opportunity to come?  We recently reduced our exposure to bonds, the first time in years, due to the more extreme overbought condition of Treasury bonds following the pandemic’s onset. The long-term chart of yields below shows this to be the case. There are two critical points to take away from the chart above.
  1. Interest rates are currently extremely oversold (top and bottom panels), suggesting that rates could indeed rise over the next few months. Such could coincide with another stimulus package or the passage of an “infrastructure” bill that leads to short-term inflationary concerns.
  2. When rates do rise from deeply oversold levels, there is a point where high rights collide with debt levels triggering either a credit-related event, a stock-market correction, or worse. 
There are currently two significant risks from rising interest rates, which investors should heed.

Valuation Expansion

One of the primary themes used by the “Permabulls” is that “valuations are cheap due to low interest rates.” That argument has been the clarion call of a generation of investors who have ignored fundamentals and valuations to chase market returns. Since 2019, when earnings growth began to deteriorate in earnest, investors bid up shares. As such, the primary driver of returns, as shown below, has come from “multiple expansion.” The “hope” remains that earnings growth will eventually catch up with valuations. However,  despite being 3/4ths of the way through 2020, the outlook for earnings continues to deteriorate. In just the last 15-days, the estimates for 2021 have declined by almost $7 per share despite repeated statements of a recovering economy. There are two problems with the thesis that “low rates justify high valuations.”
  1. Historically, such has not ever been the case; and,
  2. When rates rise, valuations quickly become an issue.
However, since stock prices reflect economic growth, the impact of rising rates on the economy is a far more significant issue.

The Debt Problem

People don’t buy houses or cars. They buy payments. Payments are a function of interest rates, and when interest rates rise sharply, mortgage activity falls as payments rise above expectations. In an economy where roughly 70% of Americans have little or no savings, an adjustment higher in payments significantly impacts consumption. 
  1. Rising interest rates raise the debt servicing requirements, which reduces future productive investment.
  2. As stated above, rising interest rates will immediately slow the housing market taking that small contribution to the economy. People buy payments, not houses, and rising rates mean higher payments.
  3. An increase in interest rates means higher borrowing costs. Such leads to lower profit margins for corporations reducing corporate earnings and financial markets.
  4. The negative impact on the massive derivatives and credit markets is the Fed’s worst fear. 
  5. As rates increase, so does the variable rate interest payments on credit cards. With the consumer struggling with stagnant wages and increased living costs, higher credit payments lead to a contraction in spending and rising defaults.
  6. Rising defaults on debt service will negatively impact banks, which are still not adequately capitalized and still burdened by massive levels of bad debts.
  7. Many corporate share buyback plans and dividend issuances are accomplished through cheap debt, leading to increased corporate balance sheet leverage. That will end.
  8. Corporate capital expenditures are dependent on borrowing costs. Higher borrowing costs lead to lower CapEx.
  9. The deficit/GDP ratio will begin to soar as borrowing costs rise. The many forecasts for lower future deficits will crumble as new forecasts begin to propel higher.

Payments Matter

I could go on, but you get the idea as we discussed concerning debt-to-income ratios:
Such is also why interest rates CAN NOT rise by very much without triggering a debt-related crisis. The chart below is the interest service ratio on total consumer debt. (The graph is exceptionally optimistic as it assumes all consumer debt benchmarks to the 10-year treasury rate.)  While the media proclaims consumers are in great shape because interest service is low, it only takes small increases in rates to trigger a ‘recession’ or ‘crisis’ event.”
Am I saying rates can’t rise at all?  Absolutely not. However, there is a limit before it negatively impacts the economy, and ultimately the stock market.

Bond Prices Very Overbought

In June of 2013, when the cries of the “death of the bond bull market” were rampant, I made repeated calls that then was an ideal time to be a “buyer” of bonds.
“However, the recent spike in interest rates has certainly caught everyone’s attention and begs the question is whether the 30-year bond bull market has indeed seen its inevitable end.  I do not think this is the case and, from a portfolio management perspective, I believe this is a prime opportunity to increase fixed income holdings in portfolios.”
As shown in the chart below, that was the correct call and, despite repeated wrong calls by the mainstream analysts, bonds remained in an ongoing bullish trend. Since interest rates are the inverse of bond prices, we can look at a long-term chart of rates to determine when bonds are overbought or oversold. In 2019, rates began to slide slower as the realization that economic growth was weakening weighed on outlooks. As the yield curve began to invert, the Federal Reserve stepped in with expanded “repo” operations to shore up financial institutions. Rates kept going lower. In March of 2020, the economy was shut down due to the pandemic causing rates to plunge to record lows.

Huge Bond Buying Opportunity Coming

The plunge in rates and massive Fed liquidity caused stocks to surge to new highs despite an underlying recessionary economy. Currently, the plunge in interest rates pushed bonds to an extreme “overbought” condition.  Such suggests the most likely target for rates in the near term could be as high as 2.0%. While an increase of 1.2% from current levels doesn’t sound like much, that increase would push bonds back to “oversold.”  That move will provide the best opportunity to increase bond exposure in portfolios. We can confirm the same using a very long-term chart (50-years) of 10-year interest rates overlaid with a 10-year moving average. As you can see, that moving average has provided formidable resistance and denoted every peak in rates going back to 1988. Currently, with interest rates at the bottom of their long-term trend, the risk is that rates could indeed rise in the months ahead. What could cause such an increase in rates?
  1. A massive debt-funded stimulus package that sends increased amounts of funds directly to households.
  2. More debt-funded infrastructure programs.
  3. If the government further increases deficit spending programs that fail to produce economic benefits such as universal basic incomes. 
  4. An increase of economic activity as the economy reopens, and a post-recessionary recovery occurs.
  5. If there is a point where the Federal Reserve is unable or unwilling to monetize the entirety of the debt issuance
  6. A lack of demand by foreign buyers of U.S. debt over concerns on economic strength and financial stability due to debt-to-GDP ratios.
These lead to concerns over temporary inflationary spikes, which could drive interest rates back to the top of the long-term downtrend.

Where To Invest While We Wait For Bonds

While bond prices currently remain overbought, such a condition will likely not last very long. As shown below, markets and volatility have an inverse relationship with rates, hence the non-correlation for portfolios. The long-term log-chart of interest rates and the stock market tells the tale. This analysis also suggests that the correction that started in March is likely not over as of yet in the longer term. If rates rise back toward the long-term downtrend, bond prices will come under pressure as the stock market corrects. For investors, we can turn to our colleague Jeffrey Marcus of TPA AnalyticsHe recently analyzed the best places to invest during rising interest rates for our RIAPro Subscribers.
The 4 best performing sectors are:
  • Technology
  • Consumer Discretionary
  • Industrials
  • Materials
The 4 worst performing sectors are:
  • Utilities
  • Telecomm
  • REIT’s
  • Staples
The 2 best performing broad categories are:
  • Small-Cap Growth
  • Small-Cap
The 2 worst performing sectors are:
  • Large-Cap Value
  • Large-Cap
Commodities: Crude and Copper are positive over half the time. Crude is the best performing commodity, historically. Gold is the worst-performing commodity; it is only positive 14% of the time. 2 more focus items:
  • TECH beat the S&P500 100% of the time
  • Utilities underperformed the S&P500 100% of the time”

Not The End Of The Bond Bull

In the short term, we have cut our bond exposure and have begun to shift our allocations to protect portfolios for a rise in interest rates. However, as rates rise within their technical downtrend, the media will be replete with headlines about the death of the 40-year “bond bull market.”  It won’t be. 
  • The stock market will defy higher rates initially until rates start to undermine the valuation story.
  • A weaker economy will undermine the valuation story as higher interest rates impede consumption.
  • The bullishly biased media will find themselves lost as to why stocks crashed and earnings fell.
While in the very short-term, the current overbought condition suggests we could see more downside pressure in bonds over the next few months. Such would not be surprising. However, as we approach that point where the market begins to realize the impact of higher rates on economic growth and corporate profitability, bonds will again emerge as a haven for investors against market declines. In an economy that is $75 Trillion in debt, requires $5.50 of debt per $1 of growth, and running a $3 Trillion deficit, rates can’t rise much. Which is also why the Federal Reserve is now forever trapped at zero.

Read More

Continue Reading

Spread & Containment

Middle-aged Americans in US are stressed and struggle with physical and mental health – other nations do better

Adults in Germany, South Korea and Mexico reported improvements in health, well-being and memory.

Middle age was often a time to enjoy life. Now, it brings stress and bad health to many Americans, especially those with lower education levels. Mike Harrington/Getty Images

Midlife was once considered a time to enjoy the fruits of one’s years of work and parenting. That is no longer true in the U.S.

Deaths of despair and chronic pain among middle-aged adults have been increasing for the past decade. Today’s middle-aged adults – ages 40 to 65 – report more daily stress and poorer physical health and psychological well-being, compared to middle-aged adults during the 1990s. These trends are most pronounced for people who attained fewer years of education.

Although these trends preclude the COVID-19 pandemic, COVID-19’s imprint promises to further exacerbate the suffering. Historical declines in the health and well-being of U.S. middle-aged adults raises two important questions: To what extent is this confined to the U.S., and will COVID-19 impact future trends?

My colleagues and I recently published a cross-national study, which is currently in press, that provides insights into how U.S. middle-aged adults are currently faring in relation to their counterparts in other nations, and what future generations can expect in the post-COVID-19 world. Our study examined cohort differences in the health, well-being and memory of U.S. middle-aged adults and whether they differed from middle-aged adults in Australia, Germany, South Korea and Mexico.

A middle-aged woman looking sad sitting in front of artwork.
Susan Stevens poses for a photograph in her daughter Toria’s room with artwork Toria left behind at their home in Lewisville, N.C. Toria died from an overdose. Eamon Queeney/For The Washington Post via Getty Images

US is an outlier among rich nations

We compared people who were born in the 1930s through the 1960s in terms of their health and well-being – such as depressive symptoms and life satisfaction – and memory in midlife.

Differences between nations were stark. For the U.S., we found a general pattern of decline. Americans born in the 1950s and 1960s experienced overall declines in well-being and memory in middle age compared to those born in the 1930s and 1940s. A similar pattern was found for Australian middle-aged adults.

In contrast, each successive cohort in Germany, South Korea and Mexico reported improvements in well-being and memory. Improvements were observed in health for each nation across cohorts, but were slowed for Americans born in the 1950s and 1960s, suggesting they improved less rapidly than their counterparts in the countries examined.

Our study finds that middle-aged Americans are experiencing overall declines in key outcomes, whereas other nations are showing general improvements. Our cross-national approach points to policies that could could help alleviate the long-term effects arising from the COVID-19 pandemic.

Will COVID-19 exacerbate troubling trends?

Initial research on the short-term effects of COVID-19 is telling.

The COVID-19 pandemic has laid bare the fragility of life. Seismic shifts have been experienced in every sphere of existence. In the U.S., job loss and instability rose, household financial fragility and lack of emergency savings have been spotlighted, and children fell behind in school.

At the start of the pandemic the focus was rightly on the safety of older adults. Older adults were most vulnerable to the risks posed by COVID-19, which included mortality, social isolation and loneliness. Indeed, older adults were at higher risk, but an overlooked component has been how the mental health risks and long-haul effects will likely differ across age groups.

Yet, young adults and middle-aged adults are showing the most vulnerabilities in their well-being. Studies are documenting that they are currently reporting more psychological distress and stressors and poorer well-being, compared to older adults. COVID-19 has been exacerbating inequalities across race, gender and socioeconomic status. Women are more likely to leave the workforce, which could further strain their well-being.

A older women hugs her daughter.
Middle-aged people often have parents to take care of as well as children. Ron Levine/Getty Images

Changing views and experiences of midlife

The very nature and expectations surrounding midlife are shifting. U.S. middle-aged adults are confronting more parenting pressures than ever before, in the form of engagement in extracurricular activities and pressures for their children to succeed in school. Record numbers of young adults are moving back home with their middle-aged parents due to student loan debt and a historically challenging labor and housing market.

A direct effect of gains in life expectancy is that middle-aged adults are needing to take on more caregiving-related duties for their aging parents and other relatives, while continuing with full-time work and taking care of school-aged children. This is complicated by the fact that there is no federally mandated program for paid family leave that could cover instances of caregiving, or the birth or adoption of a child. A recent AARP report estimated that in 2020, there were 53 million caregivers whose unpaid labor was valued at US$470 billion.

The restructuring of corporate America has led to less investment in employee development and destabilization of unions. Employees now have less power and input than ever before. Although health care coverage has risen since the Affordable Care Act was enacted, notable gaps exist. High numbers of people are underinsured, which leads to more out-of-pocket expenses that eat up monthly budgets and financially strain households. President Biden’s executive order for providing a special enrollment period of the health care marketplace exchange until Aug. 15, 2021 promises to bring some relief to those in need.

Promoting a prosperous midlife

Our cross-national approach provides ample opportunities to explore ways to reverse the U.S. disadvantage and promote resilience for middle-aged adults.

The nations we studied vastly differ in their family and work policies. Paid parental leave and subsidized child care help relieve the stress and financial strain of parenting in countries such as Germany, Denmark and Sweden. Research documents how well-being is higher in both parents and nonparents in nations with more generous family leave policies.

Countries with ample paid sick and vacation days ensure that employees can take time off to care for an ailing family member. Stronger safety nets protect laid-off employees by ensuring that they have the resources available to stay on their feet.

In the U.S., health insurance is typically tied to one’s employment. Early on in the COVID-19 pandemic over 5 million people in the U.S. lost their health insurance when they lost their jobs.

During the pandemic, the U.S. government passed policy measures to aid people and businesses. The U.S. approved measures to stimulate the economy through stimulus checks, payroll protection for small businesses, expansion of unemployment benefits and health care enrollment, child tax credits, and individuals’ ability to claim forbearance for various forms of debt and housing payments. Some of these measures have been beneficial, with recent findings showing that material hardship declined and well-being improved during periods when the stimulus checks were distributed.

I believe these programs are a good start, but they need to be expanded if there is any hope of reversing these troubling trends and promoting resilience in middle-aged Americans. A recent report from the Robert Wood Johnson Foundation concluded that paid family leave has a wide range of benefits, including, but not limited to, addressing health, racial and gender inequities; helping women stay in the workforce; and assisting businesses in recruiting skilled workers. Research from Germany and the United Kingdom shows how expansions in family leave policies have lasting effects on well-being, particularly for women.

Middle-aged adults form the backbone of society. They constitute large segments of the workforce while having to simultaneously bridge younger and older generations through caregiving-related duties. Ensuring their success, productivity, health and well-being through these various programs promises to have cascading effects on their families and society as a whole.

[Get the best of The Conversation, every weekend. Sign up for our weekly newsletter.]

Frank J. Infurna receives funding from the National Institute on Aging and previously from the John Templeton Foundation. The content is solely his responsibility and does not necessarily represent the official views of the funding agencies.

Read More

Continue Reading

Economics

Inflation In Context: A Liquidity Adjusted CPI Index

First, folks, please send your prayers, thoughts, good feelings, positive energy, miracles, healing touch, whatever you got, and whatever it takes to GMM’s beloved Carol K., who keeps battling, never giving up against a serious disease in Boston at…

Published

on

First, folks, please send your prayers, thoughts, good feelings, positive energy, miracles, healing touch, whatever you got, and whatever it takes to GMM’s beloved Carol K., who keeps battling, never giving up against a serious disease in Boston at one, if not the best hospital in the world.  Even in her critical condition, she contributed to this post — though she may not agree with all its final points.  She’s truly an amazing and incredibly strong human being.  Semper Fi and Godspeed, CK.  

We had a few requests to write up something about today’s hot U.S consumer price inflation data. So we put together a quick note in honor of our friend from down in the Land of Oz, GMac, one of the most decent human beings on earth. He is one proud father of a super studly 18-year son, who is an incredible surfer and someday wants to surf Mavericks.  God. Bless. His. Soul.

Let us preface our inflation note with one of our favorite quotes:

World War II was transitory – GMM

Recall our post in January, Ready For 4 Percent CPI By Mid-Year?, when we speculated the U.S. would be experiencing 4 percent inflation, possibly 5 percent by mid-year.  We were beaten down like a red-headed stepchild (I am at liberty to say that as I have been a ginger most of my life).

GMM was also one of the first to point out the base effects (12-month comps) would kick in April and May 2021 due to the deflation that troughed last year from the COVID crash.  But don’t be gaslighted the lastest few month-on-month core prints essentially negate the base effect excuse for high inflation as three-month core CPI is now running at 7.9 percent on an annual basis.

We don’t know for certain if inflation will stick and move higher or lower but as better folk we are taking the over, however.

Liquidity Tsunami

We do know the major global central banks have pumped in a shitload of high-powered money into the global financial system over the past year — as in around $10 trillion, close 50 percent increse of their collective balance sheets.   Here’s Dr. Ed’s excellent chart,

Moreover, banks now seem eager to start lending, thus creating more endogenous money on top of the trillions upon trillions of base money central banks have already injected.

Transitory?  Yeah, right.   

It’s not a question whether the Fed has the tools to reign it in, it’s do they have the ‘nads?  Given the multiple asset bubbles that would burst, and bust spectacularly, if the Fed draws it word,  we seriously doubt it. 

The following chart from Dr. Ed also illustrates not only has the digital printing press been working overtime, the credit system is just fine and dandy as deposits are expanding.  Don’t be confused by, yes, the base effect, as the money aggregates have a much large base to grow from they did a year ago before the pandemic.

Tough to beat comps after expanding over 25 percent 

Note, these are monetary aggregates, which include cash in circulation, bank deposits among near money and other short-term time deposits, not the expansion of the Fed’s balance sheet, though it does hugely influence the data.  

This image has an empty alt attribute; its file name is yardeni.png

Big spurts from the digital printing press without a credit crisis and an impaired financial system — as was the case after the Great Financial Crisis — will almost always generate inflationary pressures.   Stimulating demand without production during a supply shock is not optimal unless carefully targeted to those who need it most.   

It’s very amusing to us to see the FinTweets, “peak inflation has arrived.”  True, if the financial markets crash.  But what do they base their conclusion on?  A warm feeling in their tummy?   

Show me the money data, Jerry.  

Banks Itching To Lend

Banks now seem eager to start lending, thus creating more endogenous money on top of the trillions of base money central banks have injected.  

Loans are “starting to pick up,” and there’s plenty of borrowing capacity because companies have unused credit lines, {BofA CEO Brian ]Moynihan said. Loan growth has been a challenge across the banking industry because many consumers and businesses are sitting on cash from savings and stimulus during the pandemic. – Bloomberg, June 6

This should send shivers up the Fed’s spine, but we are not so sure.  We are also not so sure they are not flying blind and will again miss the next big one just as they have in the past. 

The Chart: Liquidity Adjusted Inflation. 

It’s late and we want to present the chart in honor of GMac. 

We have taken the non seasonaly adjusted year-on-year change of CPI and subtracted a scaled up version of the Chicago Fed’s  National Financial Conditions Index (NFCI), which measures how loose or tight monetary conditions are in the U.S..  It’s has been running at an extreme historical low — i.e., very loose financial conditions.   

You can see the 105 indicators it is based upon here.

We are trying to give context to the inflation data of how loose and accomodative finnancial market and monetary conditions are currently.   As you can see, today’s year-on-year CPI print less the NFCI is at the highest level since November 1990, which was in the middle of the first Gulf war, Where the Fed was facing spiking inflation due to the run-up in oil and a recession.  

Prior to that our adjusted inflation index hasn’t been so high since the high inflation late 197Os and early ‘80s.  Gulp. 

Clearly, it is a different environment in today’s economy.  In fact, just the opposite – the economy is ready to roar for the next several quarters as consumers are flush with cash, the supply chain is still a mess due to the “bullwhip effect” (more on this in a future post), and new businesses should be looking for credit and loans to rebuild and start new ventures.    

Most of all, folks, the central banks still have their pedal to the metal and balls to the walls, and as we all know (well some of us),

Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. – Milton Friendman 

The Upshot

Inflation is way too high given exremely easy financial and monetary conditions.  There will be blood. 

Finally 

Life is transitory. 

Inflation has eroded my purchasing power in my transitory life.  Bring back the $.35 Big Mac, which was only about 20 percent of the minimum wage.  Now?  About 40-50 percent.  Enough to spark a revolution. 

Finally, the Democrats should begin to worry.

Stay tuned. 

Read More

Continue Reading

Economics

Top Stocks To Buy Now? 3 E-Commerce Stocks To Watch

Could these e-commerce giants be a steal at their current price tags?
The post Top Stocks To Buy Now? 3 E-Commerce Stocks To Watch appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

Published

on

3 E-Commerce Stocks For Your June Watchlist

As we continue to see U.S. vaccination and stimulus efforts strengthen the economy, the retail industry could gain momentum. In particular, some of the top e-commerce stocks in the stock market now would be in focus. For the most part, this would be the case as consumers would be eager to spend their saved-up pandemic funds. Sure, some would argue that e-commerce trends could slow as we see the return of brick-and-mortar operations across the country. But, digital shopping offers one key benefit over in-person shopping, convenience. You can’t deny that consumers have spent the past year shopping online more than ever. Now, it has simply transformed from a matter of necessity towards a quality of life service. Because of this, investors and companies alike could stand to benefit.

Even now, some of the biggest names in the e-commerce space continue to bolster their services and offerings. For instance, we could look at the likes of Chinese e-commerce giant, Alibaba (NYSE: BABA) now. Just this week, the company launched its interactive cloud-based Livestream shopping service. On top of that, CTO Cheng Li recently revealed plans to develop autonomous delivery trucks over the next year. Truly, the integration of tech and retail, that is e-commerce, continues to push boundaries. Understandably, this appears to be the industry working hard to retain the customers it gained throughout the pandemic.

Meanwhile, even conventional retailers who quickly adopted e-commerce practices are flourishing now. Take Restoration Hardware (NYSE: RH) and Signet Jewelers (NYSE: SIG) for example. RH is a high-end furniture retailer, while Signet is the largest retailer of diamond jewelry. Both RH stock and SIG stock have more than tripled in value over the past year. On that note, here are three top e-commerce stocks worth noting in the stock market today.

Top E-Commerce Stocks To Buy [Or Sell] Now

Chewy Inc.

Chewy is an e-commerce company that focuses on pet products and services. It aims to be one of the most trusted and convenient destinations for pet parents everywhere. The company is currently a preeminent source for pet products, supplies, and prescriptions as a result of its broad selection of high-quality products. It also continues to develop innovative ways for customer engagements and partners with more than 2,500 of the best brands in the pet industry. CHWY stock currently trades at $75.08 as of 2:27 p.m. ET and is up by over 50% in the last year. Yesterday, the company reported strong first-quarter 2021 financial results.

Firstly, the company reported net sales of $2.14 billion, growing by 31.7% year-over-year. Net income for the quarter was $38.7 million. This great start to the year is looking to be an exciting and busy time for the company. The company also said that it has been continuing to execute its growth roadmap, expand its database, and increase its addressable market-expanding verticals. Despite its main business being pet retail, the company also has been expanding on its telehealth services for pets.

In May, the company expanded its proprietary and popular telehealth service called Connect with a Vet. It introduced a series of features enhancing the experience of customers and veterinarians. This would include video consultation, the ability to preschedule a virtual vet consultation, and extended hours of operation including weekends. These features will no double help make pet health and wellness more accessible and affordable everywhere. For these reasons, will you consider adding CHWY stock to your portfolio?

[Read More] 4 Artificial Intelligence Stocks To Watch Right Now

Amazon Inc.

Next on this list is e-commerce titan, Amazon. Amazon is a multinational technology company that not only focuses on e-commerce but also has a portfolio of tech services. This would include cloud computing, digital streaming, and artificial intelligence. In brief, it also has one of the largest online marketplaces in the world by revenue. The company is also one of the world’s most valuable companies and one of the highest global brand valuations. AMZN stock currently trades at $3,344.62 as of 2:28 p.m. ET. In late April, the company reported its first-quarter financials.

best tech stocks (AMZN Stock)

In it, the company posted net sales of $108.5 billion, an increase of 44% year-over-year. Net income increased to $8.1 billion in the first quarter or a diluted earnings per share of $15.79. Operating income increased to $8.9 billion in the first quarter more than doubling from a year earlier. The company stated that as its Prime Video streaming service turns 10, it boasts over 175 million members that have streamed shows and movies in the past year. Streaming hours are up by more than 70% year-over-year.

The company’s Amazon Web Services (AWS) has become a $54 billion annual sales run rate business, competing against the world’s largest technology companies. AWS also continues to enjoy growth and is up by 32% year-over-year. AWS also announced significant customer momentum, with new commitments and migrations from customers spanning many major industries. This would include Walt Disney’s (NYSE: DIS) Disney+ expansion to more than 100 million subscribers around the world. Given all of this, won’t you say that AMZN stock is a top e-commerce stock to consider buying?

[Read More] Best EV Stocks To Watch This Week? 4 For Your List

Shopify Inc.

Topping our list today is the leading e-commerce enabler, Shopify Inc. For some context, the company maintains and operates its proprietary e-commerce platform of the same name. On the Shopify platform, retailers across the globe can start, grow, market, and manage online stores of varying sizes. For a sense of scale, Shopify currently facilitates over 1.7 million businesses across 175 countries via its platform. As it stands, SHOP stock is currently trading at $1,236.80 a share as of 2:28 p.m. ET. Despite its current valuation, could it have more space to grow moving forward?

best tech stocks to buy (SHOP stock)

For one thing, the company does not appear to be slowing down anytime soon. This is evident as Shopify continues to grow its market reach and services with major partnerships. Firstly, the company is currently working with Google (NASDAQ: GOOGL) to connect Shopify merchants with consumers through Google Search. No doubt, this would significantly boost the exposure of Shopify’s offerings, to say the least. Now, Shopify products will appear across Google’s daily 1 billion shopping-related searches, according to the duo.

While this is great for the company, it continues to grow its collaborations list. This week, news broke of Shopify’s team-ups with financial firm Affirm (NASDAQ: AFRM) and streaming giant Netflix (NASDAQ: NFLX). With Affirm, Shopify now brings Shop Pay installments to buyers. By allowing merchants early access to Shop Pay installments, Shopify found that their average order volumes gained by up to 50%. Moreover, Netflix is reportedly selling merchandise from its increasingly popular line of self-produced series. Overall, Shopify appears to be firing on all cylinders now. Would this make SHOP stock a top buy for you?

The post Top Stocks To Buy Now? 3 E-Commerce Stocks To Watch appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

Read More

Continue Reading

Trending