Article by Investment U

Is Amazon (AMZN) About to Take Over Retail?

by Mike Kapsch and Jeannette Di Louie, Investment U Research
Tuesday, July 24, 2012

Beginning this September, Amazon (Nasdaq: AMZN) will begin offering same-day deliveries. Is the e-commerce giant poised to take over retail altogether?

This fall, the retail market could be flipped completely on its head…

What’s about to happen?

Well, just consider this scenario:

There’s a lot of hype surrounding The Avengers DVD hitting stores September 25.

If you had the option to drive and pick up your copy at a big box retailer – like Best Buy (NYSE: BBY) or Target (NYSE: TGT) – or order it online and receive it the same day, at a not-much-higher price, which option would you choose?

Beginning this September, that’s exactly what Amazon (Nasdaq: AMZN) plans to do – same-day deliveries.

According to Slate, “Amazon is investing billions to make next-day delivery standard and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop.”

Currently, Amazon does have local express delivery that can deliver certain items on the same day you place your order. But that’s only for customers in a few select cities who pay $79 a year to be Amazon Prime members.

This is a whole new ballgame. And in September, residents in California and Pennsylvania are going to be the first to have the chance to embrace this new way of shopping.

Probably Not Quite the Death of Traditional Retail

For me, it’s a no brainer. I’d order it online and happily sit at home waiting for it to appear on my doorstep. Of course, I personally don’t like going anywhere to shop, so my opinion could be just a bit biased.

For instance, my colleague Jeannette Di Louie feels quite differently:

“Women use traditional shopping as a way to socialize and blow off steam just as much as to actually fulfill a need. To the feminine mind, it’s quite simply fun to browse physical products for a few hours… much like men find it enjoyable to spend time wandering a golf course.”

So while traditional retailers will undoubtedly have to step up their game to keep up with their online competition, don’t expect them to be disappearing anytime soon. Amazon won’t be taking over that part of the world just yet.

With that said, its new facilities will still positively impact its bottom line going forward.

Even Creating its Own Smartphone…

Back in 1995, the company started out as simply an online bookstore, but it wasn’t long before it began expanding into other areas of commerce. Today, Amazon offers everything from media downloads to jewelry, and electronics to home improvement items, such as kitchen cabinets. And the company has been pushing more strongly into the clothing business as of late, expanding even further into the retail world.

Then there are its other capitalistic ventures, such as its eReader, the Kindle, and the growing speculation that it’s also working on its own smartphone. Yet, as if that’s not enough, the retail giant is still busy expanding, with specialized sites already established in Canada, China, France, Germany, Italy, Japan, Spain and the United Kingdom.

Ever since last fall, Amazon.com has concentrated millions of dollars into improving its shipping services. More specifically, the company is building new facilities around the country, including the Mid-Atlantic, Midwest and San Francisco Bay region.

And a number of companies could see their profits squeezed if Amazon’s same-day delivery becomes a hit. Investors better pay attention…

The Winners and Losers…

Wal-Mart (NYSE: WMT), the nation’s largest food retailer and the biggest retailer worldwide, is at the top of this list. The company has already seen its customer base fizzle at the hands of Amazon in recent years. And this latest announcement won’t help change anything for the better.

By the same token, other retailers like Target (NYSE: TGT), Costco (Nasdaq: COST) Barnes & Noble (NYSE: BKS) and Bed Bath & Beyond (Nasdaq: BBBY) come to mind.

Also, shares of clothing outlets such as J.C. Penney’s (NYSE: JCP) and/or Macy’s (NYSE: M) could soon come under fire, as well.

But Amazon sells much more than what these companies offer.

That’s why the home improvement sector could suffer. Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) are two companies that could see shares dip if same-day delivery is as popular as many people think it will be.

Most construction jobs that require precise measurements will likely keep customers coming back to stores like Lowe’s and Home Depot. But purchasing power tools or ceiling fans or miscellaneous items probably won’t. At least not when Amazon likely has a superior selection and better prices – plus, now someone will deliver them right to your door within the same day.

Which brings us to delivery companies…

Amazon hasn’t stated plans to partner with major shipping firms such as UPS (NYSE: UPS) or FedEx (NYSE: FDX), but given how much they already benefit from Amazon, this could be one of the hot spots for investors other than directly investing in Amazon itself.

Of course, only time will tell how successful the world’s largest online retailer’s same-day delivery service will be.

Already An Impressive Bottom Line

Amazon already has an impressive bottom line. Every year, it seems to significantly and consistently grow its revenue and profits. And last quarter, it beat out even its most bullish analysts’ expectations.

Thanks in part to the increasing popularity of its Kindle Fire tablet, sales increased 34% over Q1 2011 revenue to 13.18 billion. Those kinds of results have sent Amazon’s stock skyrocketing from its recession low of $37.87 to well over $200 today.

But Amazon stock certainly isn’t cheap from a valuation standpoint – its forward P/E is nearly 90. But all that means is that there’s plenty of growth cooked into its current price. But as Alexander Green has said many times, the only thing that drives future stock prices is earnings growth. And if Amazon can continue to grow earnings at an impressive clip, P/E means a lot less about the company’s valuation. However if growth stalls, you could see a mass exodus from such an expensively valued stock.

The company will be announcing its Q2 results on Thursday, July 26. Analysts seem to have mixed opinions about how the company fared. Considering that many retailers struggled in June, Amazon might not be able to pull off another quarterly surprise.

However, if it does happen to disappoint and the stock dips, it could present a great buying opportunity. With a strong past record of growth and increasing customer convenience, Amazon looks poised to be a world dominator for some time. The only question lies in what the fair value is…

Good Investing,

Mike and Jeannette

Article by Investment U

By TraderVox.com

Tradervox.com (Dublin) – The south pacific currencies increased the most this month against the US dollar after the European Central Bank President Mario Draghi indicated that policy makers will do everything possible to quell the preserve the euro, boosting demand for commodity related currencies. The two south pacific dollars increased as investors increased their bets central bank officials will act by intervening in the bond market to stop the high borrowing cost in countries such as Spain. Spanish two-, five-, ten-, and 30-year yields soured beyond 7 percent yesterday. The Aussie and Kiwi also rose as global stocks and commodities advanced.

Ravi Bharadwaj noted that the considerable gain experienced by the New Zealand dollar is as a result of the risk-on mood sparked by Draghi’s comments. Ravi is a market analyst at Western Union Business Solutions, which is a unit of Western Union Co in Washington. Apart from Draghi’s comments, the south pacific currencies also rose as Standard & Poor’s 500 Index increased by 1.9 percent and the MSCI Asia Pacific Index increased by 0.8 percent. Spanish 10-yar yields rose to a record 7.75 percent, increasing the pressure on ECB to intervene in the bond market.

As Draghi Spoke in the Global Investment Conference in London yesterday, he said that the increasing sovereign-bond yields may drop within the European Central Bank jurisdiction following its intended intervention. He promised that the bank’s interventions will work. The Australian dollar, nicknamed Aussie, surged 1.1 percent against the US dollar to trade at $1.0402 yesterday in New York and later closed lower at $1.0397 which is a 0.9 percent higher than the previous day’s close. The Aussie rose by 0.9 percent against the yen to exchange at 81.32 yen per Australian dollar. The New Zealand dollar was up by 1.8 percent against the US dollar after Draghi’s comment, to 80.30 US cents and closed the day lower at 80.19 cents, which is a 1.6 percent increment from previous day close. The kiwi climbed by 1.7 percent against the yen to trade at 62.72 yen.

Disclaimer
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Article provided by TraderVox.com
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By Central Bank News

London Gold Market Report
from Ben Traynor
BullionVault
Friday 27 July 2012, 07:00 EDT

SPOT MARKET gold bullion hit a five-week high at $1625 an ounce during Friday morning’s London trading, on course for a weekly gain that would see the pattern of alternating up and down weeks stretched to week number eleven.

Silver bullion also held onto most of its recent gains, trading around $27.70 per ounce for much of the morning.

A day earlier, gold and silver rallied following comments from European Central Bank president Mario Draghi that were taken to suggest the ECB could start buying government bonds again.

“We believe the risk [for gold] now lies with a move to $1640, the June high,” says the latest technical analysis note from bullion bank Scotia Mocatta.

“”There will be buyers now on any retracement to “1590.”

“Technically the price action is starting to look a bit more constructive,” agrees Credit Suisse analyst Tom Kendall.

“But that could fade as quickly as it appears to have been building… physical demand is still pretty soft [and] positioning is disinterested across much of the investment community.

Based on London Fix prices, gold bullion looked set for its biggest weekly gain in seven weeks by Friday lunchtime in London. A PM gold fix of $1626.75 or higher would make this the biggest weekly gain since the last full week in January.

With markets looking ahead to preliminary US GDP figures due to be published later, European stocks were broadly flat this morning, having rallied on Thursday after Draghi said the ECB “is ready to whatever it takes to preserve the Euro”.

“It is a signal that the ECB is closer to reactivating bond purchases if all else fails,” says Julian Callow, head of international economics at Barclays.

The ECB’s Securities Markets Programme, which was launched in 2010, was used last year to buy Spanish and Italian government bonds on the open market.

“The thing we wonder here is exactly where the Bundesbank stands…[since it has] historically been resisting the reactivation of the SMP.”

“The Bundesbank has not changed its opinion [on ECB bond purchases],” a spokesman for the German central bank told Dow Jones Newswires on Friday.

“[Draghi has] maneuvered himself into an extremely difficult situation,” warns Carsten Brzeski, senior economist at ING Group.

“[Market] expectations are very high.”

“I don’t believe you will see government bond purchases yet,” adds Jacques Cailloux, chief European economist at Nomura in London.

“We have some doubts about whether the interventions will be of the required scale,” says Nick Kounis, head of macro research at ABN Amro in Amsterdam.

“It therefore seems likely that the bond purchases will just allow policy makers to muddle through unless much more financial firepower is put on the table.”

Following Draghi’s comments, benchmark yields on 10-Year Spanish government bonds fell back below 7%, while yields on Italian 10-year bonds fell below 6%.

“Draghi ist ein Plünderer des Bürger-Spargroschens”, says a headline from German newspaper Handelsblatt. The phrase, which loosely translates as “Draghi is plundering the nest eggs of citizens”, is attributed to German politician Frank Schaeffler, a member of the FDP party which forms part of the governing coalition.

“Higher inflation is an inevitable consequence of this ECB policy,” adds Klaus-Peter Willsch, a member of chancellor Angela Merkel’s CDU party.

“The signs are already clear to see: in prime real estate prices, prices of agricultural and forest land, gold, coin collections, classic cars…the flight into real values has already begun.”

In the US, the first estimate of second quarter gross domestic product is due out later today, expected to show a slowdown in economic growth.

“If the US GDP number falls short of expectations, it would once again fuel speculations on Fed easing, which would help gold,” reckons Phillip Futures analyst Lynette Tan in Singapore.

Elsewhere in the US, hedge fund Paulson & Co. may have lost closet to $50 million on its investment in gold mining firm NovaGold after its stock saw its biggest fall in three years, newswire Bloomberg reports.

Paulson & Co. offers investors accounts denominated in gold and holds a large number of shares in the SPDR Gold Trust (GLD), the world’s biggest gold ETF.

GLD gold bullion holdings held steady yesterday at 1252.5 tonnes, though they remain at their lowest level since January.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By Central Bank News

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

Riskier assets saw major gains during the European session, following a speech from ECB President Draghi in which he pledged to do everything necessary to preserve the European Union. That being said, analysts were quick to mention that the speech did not contain any specifics on different ways to combat the region’s debt crisis, and any gains made by higher-yielding assets could be temporary. As we close out the week, traders will want to pay close attention to the US Advance GDP figure, scheduled for 12:30 GMT. It is expected that the news will indicate a further slowdown in the US economic recovery, which if true, could lead to dollar losses during afternoon trading.

Economic News

USD – Dollar Tumbles amid Increase in Risk Taking

The safe-haven US dollar fell against most of its main currency rivals yesterday, following a speech from the President of the European Central Bank, which resulted in risk taking in the marketplace. The AUD/USD shot up more than 100 pips after the speech, eventually peaking at 1.0414 before staging a mild downward correction and leveling out at the 1.0395. The USD/CHF tumbled some 155 pips over the course of the European session to reach as low as 0.9749. The pair did see minor upward movement later in the day, and eventually stabilized at 0.9770.

Turning to today, the dollar is forecasted to see another volatile session when the US Advance GDP figure is released at 12:30 GMT. Most analysts expect today’s news to come in around 1.5%, which if true, would represent a slowdown in the US economy and could lead to further losses for the USD before markets close for the week. That being said, traders will also want to pay attention to any developments out of the euro-zone. Negative European news could result in another round of risk-aversion, which could help the dollar recover some of its recent losses.

EUR – Analysts Warn Euro Gains Could be Limited

The euro surged in mid-day trading yesterday, following a positive speech from the President of the European Central Bank in which he said all necessary steps would be taken to preserve the common-currency. The EUR/USD spiked close to 200 pips as a result of the speech, eventually peaking at the 1.2315 level. The EUR/JPY, which only recently hit a 12-year low, gained over 150 pips before hitting resistance at 96.25. Furthermore, the EUR/AUD, which hit a record low earlier in the week, moved up around 80 pips.

As markets prepare to close for the weekend, analysts continue to warn traders that the euro’s recent upward trend may be temporary. While yesterday’s speech from the ECB President did boost confidence in the euro-zone economic recovery, it did not provide any specific plan for combating the region’s debt crisis. Any negative announcement today regarding rising Spanish bond yields or a slowdown in the German economy could result in losses for the euro.

Gold – Gold Gains Close to $20 during European Trading

The price of gold soared above $1620 an ounce yesterday, following a speech from ECB President Draghi which resulted in risk taking in the marketplace. Overall, the precious metal increased by just under $20 for the day before staging a minor downward correction and leveling out around the $1615 level.

Today, the direction gold takes will largely be dependent on how investors interpret the US Advance GDP figure, set to be released at 12:30 GMT. If the indicator signals a slowdown in the US economy, the dollar may extend yesterday’s bearish trend against the euro, which could help gold extend its recent upward movement.

Crude Oil – Crude Oil Benefits from Euro-Zone News

The price of crude oil increased by over $2 a barrel yesterday, as an increase in risk taking benefited commodities during the European session. A bearish dollar made crude oil more affordable for international buyers, resulting in the upward correction. Oil peaked at $90.43 before turning downward and stabilizing at the $90.10 level.

Today, crude traders will want to continue monitoring developments out of the euro-zone. Any signs that the debt crisis in the region is spreading to Germany may outweigh the positive outlook from the ECB President yesterday. Downward movement by the euro could result in oil giving back some of its recent gains.

Technical News

EUR/USD

The Relative Strength Index on the weekly chart has crossed into oversold territory, indicating that this pair could see upward movement in the coming days. This theory is supported by the Slow Stochastic on the same chart, which is currently forming a bullish cross. Going long may be a wise strategy for this pair.

GBP/USD

A bullish cross has formed on the daily chart’s MACD/OsMA, signaling that an upward correction could occur in the near future. Furthermore, the Williams Percent Range on the weekly chart has fallen into oversold territory. Opening long positions may be the right choice for this pair.

USD/JPY

While the weekly chart’s Williams Percent Range has dropped into oversold territory, most other long term technical indicators place this pair in the neutral zone. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/CHF

A bearish cross on the weekly chart’s Slow Stochastic appears to be forming, indicating that a downward correction could occur in the near future. Additionally, the Relative Strength Index on the same chart has crossed into overbought territory. Going short may be the wise choice for this pair.

The Wild Card

USD/CAD

A bullish cross has formed on the daily chart’s MACD/OsMA, signaling that an upward correction could occur in the near future. Furthermore, the Williams Percent Range on the same chart has dropped into oversold territory. This may be a good time for forex traders to open long positions ahead of a possible upward breach.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by AlgosysFx

European Central Bank chief Mario Draghi has pledged full support for Europe’s single currency, boosting stock markets and easing pressure on Spanish borrowing costs. The ECB is ready to do whatever it takes to preserve the Euro.  Keeping risk premiums under control was part of the central bank’s mandate as they affected the transmission channels for ECB policy. The interest rate, or yield, on 10-year Spanish bonds fell to 7.197 percent from 7.376 percent, a level that is nonetheless still considered
unsustainable over the long term.

The comments by ECB president Mario Draghi look to have been the main catalyst sending the markets higher. In particular the comments about doing whatever it takes within the central bank’s mandate to preserve the Euro has seen markets rebound, but the statement that addressing high yields on sovereign debt in the euro area comes within the central bank’s mandate is particularly noteworthy. It suggests that the ECB may well do something about capping rising bond yields. Attention will now inevitably shift the focus towards next week’s ECB rate meeting to see if Mr Draghi means what he says.

Financial markets have relentlessly tested the Euro Zone’s ability to overcome debt crises in countries like Greece, Ireland, Portugal and Spain, and the ECB is the European Union institution most able to react quickly to developments. ECB responses to date include two cash injections of more than €1 Trillion in the Euro Zone banking system via long-term refinancing operations and the purchase of government bonds on secondary markets. The central bank has also cut its benchmark refinancing rate to a record low of 0.75 percent. Euro Zone leaders have agreed meanwhile on measures to help stem the crisis, and Mr Draghi stressed that progress has been extraordinary in the last six months.

But Europe’s current anti-crisis strategy is having only a limited effect and the central bank is the only player currently capable of acting fast enough. The bank could inject even more money into the banking sector, resume its purchases of government bonds on secondary markets, cut interest rates further, or come up with a way to provide Euro Zone financial rescue funds with more resources. Mr Draghi’s comments underpin recent remarks by ECB members such as Nowotny yesterday that the central bank could participate in beefing up current measures, such as increasing the firepower of ESM bailout funds, which would lead the ESM to have a banking license. He referred to the future Euro Zone rescue fund, the European Stability Mechanism.

This suggests the ECB is moving closer to undertake QE, which would be a much-needed shot in the arm for markets and go some way into forming the fiscal unity the euro-area desperately needs in order to arrest the debt crisis.

Get more news and analysis at AlgosysFx Forex Trading Solutions

Source: ForexYard

According to the International Monetary Fund (IMF), Britain’s economy is set to slump by a massive 2.8% this year. The global economic watchdog was extremely concerned, as this forecast indicates that Britain’s economy will decline twice as fast as previously predicted. Therefore, Britain’s economy is set to shrink more than that of the Euro-Zone, the United States and Japan. This data is likely to kick-in when the Bank of England (BoE) meets next week and cuts Britain’s Interest rates. The consequence of this is highly likely to lead to a further weakening of the Pound Sterling.

The IMF data has sparked worries across the financial world, as London is seen as 1 of the top 3 global financial capitals, along with New York and Frankfurt. The Pound may therefore weaken as the financial crisis continues to take its toll on the British economy. It is true that every advanced country in the world is suffering from the global economic downturn. However, Britain has been hit severely largely due to her previously strong banking and energy sector.

Since the commencement of the global financial crisis, banks around the world and Oil prices have been hit significantly. For example, the British government increased its stake in the Royal Bank of Scotland (RBS) last week, which sparked renewed fears of the nationalization of Britain’s banking sector. Additionally, the price of Crude Oil has slid from as high as $147 a barrel back in July, to $41 today. Britain has felt the brunt of the global recession more than any other country in the developed world, owing to its dependence on these 2 sectors. Also, the Pound sterling has felt the knock-on effects, as the British currency has tumbled against the Dollar and Euro in recent months.

A couple of months ago, the Pound against the Euro and Dollar stood at €1.53 and $2.11 respectively. However, the GBP’s rate vs. these 2 currencies currently stands at €1.078 and $1.43. The British government and the Bank of England (BoE) have run out of things to do to stimulate Britain’s economy. Things have gotten so bad in Britain that the opposition Conservative Party has opened a double-digit lead in most polls. In the short-medium term, the Pound is likely to decline against most of its major currency pairs. If you want to learn more about the current global economic situation and the forex market, you can start trading with our standard account, please visit ForexYard.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.