To The Moon

If you thought Mon, 25 Sep 2023 was bad, then Tue, 26 Sep 2023 must be end of the word.

Stocks tumbled after a slew of economic data stoked fears about the US economy’s outlook and the one more “elusive” interest hike from US central bank.

At end of trading day:

• DJIA: -1.14% (-388.00 to 33,618.88). 388 points fall was Dow biggest one-day decline since March 2023.

• S&P 500: -1.47% (-63.91 to 4,273.53). This is S&P lowest close since June 2023; that was S&P 500’s threshold that it broke through before entering into bull market territory.

• Nasdaq: -1.57% (-207.71 to 13,063.61).

From what I have read, the following US official data released — further spooked investor:

• New home sales.

• Housing price.

• CB consumer confidence report.

• Housing data released on Tuesday (26 Sep 2023) morning showed that new home sales fell -8.7% in August from July.

• It should not come as a surprise, as mortgage rates has just edged above 7%, America’s highest levels in decades.

• Saving consolation is new home sales were still higher than they were a year earlier.

Will this be a concern for the US government and Central bank?

• At the same time, US home prices climbed to a record high in July 2023.

• This marked the 6th consecutive month of increase as a tight supply of homes continues to drive up prices.

• Consumer confidence declined again in September.

• Hitting its lowest levels since May 2023, according to latest data from the Conference Board.

• Consumer Confidence Index fell to 103 in September, down from August’s 108.7.

• It was also below the 105.5 economists surveyed by Bloomberg had expected.

• Although consumers’ views on the present economic situation remained relatively unchanged, they are however feeling worse about what's ahead for the economy going into new year especially.

Based on CNN’s Fear & Greed Index:

• Current market indicator sank to a “Fear” reading of 26.

• This reading is just above “Extreme Fear”, marking index’s lowest level since March 2023, when the collapses of regional lenders Silicon Valley Bank and Signature Bank roiled financial markets.

The surprise of the day must have been the lawsuit launched by the Federal Trade Commission (FTC) at $Amazon.com(AMZN)$.

What is the Amazon lawsuit about?

The FTC is preparing an antitrust lawsuit against Amazon that could result in a breakup of the company

The lawsuit will likely target Amazon's:

• Online marketplace.

• Its subscription service Prime.

• Its logistics & advertising services.

• Its pricing policies for 3rd-party sellers

The FTC argues that Amazon abuses its market power and harms competition, consumers, and innovation.

The lawsuit is expected to be filed as soon as this month, after a final meeting between the FTC and Amazon

The lawsuit will be a major test for FTC Chair Lina Khan, who is known for her criticism of Amazon's dominance, harking back to her Yale university days where she wrote an influential paper arguing that antitrust laws had failed to keep Amazon in check.

To be “fair”, Ms Khan and the FTC have been equally critical of other Tech giants. Namely, $Alphabet(GOOG)$ and $Meta Platforms, Inc.(META)$ .

On record, it was not just FTC that was hurling the lawsuit at Amazon but also 17 state attorneys general suing the e-commerce giant, alleging it illegally maintained monopoly power.

Unsurprised, Amazon has fought back and rejected the antitrust lawsuit filed on Tuesday. Amazon denies the allegations and claims that it faces intense competition and offers benefits to customers and sellers.

• Upon news of the lawsuit, Amazon stock price fell by -4%, ending the day at $125.98.

• This was almost Amazon’s stock split price ($124) after a 1-for-20 stock split on 17 Jun 2022.

• This means despite [a] overall weak market sentiments and [b] the vindictive lawsuit, Amazon so far still manages to “retain its value”.

Is now the right time to add Amazon to your portfolio?

In case you are interested, my other “PICK” posts. HOT! out of the oven this morning. Enjoy:

• Is JP Morgan right about Oil @ $150 this time? Click here! to read & give a “like”. Thanks.

• Invest in IPO stock Cainiao? Read & decide. Click here! to read & like.

• Do you think the lawsuit brought against Amazon is justified?

• Do you think Amazon stock price will continue to trend lower this week or it will recover yesterday’s lost grounds?

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