AMZN - Best buy 27 Nov 2023 & beyond? Read & decide.
Despite 20 Nov 2023, being a short trading week of 3.5 days, it still packed a punch by the time market closed midday on Black Friday.
Some analysts even regarded it a mini-bull run.
For the week ending 24 Nov 2023:
DJIA: +1.22% (+425.33 to 35,390.15). Best performer of the week.
S&P 500: +1.1% (+49.79 to 4,559.34). The wolves are touting that it might strike the 5k mark.
Nasdaq: +1.06% (+149.42 to 14, 250.85). Still trading above the 14K mark, that is a good sign.
The million-dollar question on everyone’s mind on the last trading week of November 2023 - where is the US market heading this week?
The US stock market is expected to face some volatility this week, as investors await the earnings reports of several major companies and the release of key economic indicators.
Personally, I think US stocks are poised for a slightly lower open on Mon, 27 Nov 2023:
As investors await quarterly earnings reports of several major companies. Eg. $CrowdStrike Holdings, Inc.(CRWD)$ (28 Nov), $Salesforce.com(CRM)$ (29 Nov), $Snowflake(SNOW)$ (29 Nov), $Marvell Technology(MRVL)$ (30 Nov)
Ahead of US October 2023 Personal Consumption Expenditure (PCE) report, that will be release, on Thu, 30 Nov 2023.
US pre-market indicators seems aligned too.
As of Monday, 6:30 pm Singapore time:
Dow Jones Industrial Average futures lost -0.20% (71 points).
S&P 500 futures lost -0.22% (10 points).
Nasdaq Composite futures lost -0.19% (30 points).
The Core PCE report will be closely watch because:
It paves the way for the Fed’s final FOMC meeting of 2023, on Dec 12 -13.
It sets the stage for the Fed to keep the Fed fund rate status quo for the 3rd month.
For the record, US’s October 2023 Core PCI came in at 4.0%, that is -0.1% lower than September 2023 data.
It was also the 8th consecutive monthly decline for US Core PCI.
Based on the latest CME Fed Watch tool, the probability for the Fed to keep interest rate status quo in December 2023 stands at 96.8%.
So far, this tool has been spot-on when predicting the Fed’s interest policy decision.
Let’s hope it remains so for the last time in 2023.
Last Wed, 22 Nov 2023 - US weekly jobless claims report, for week ending 18 Nov 2023 may throw some light on the state of US economy.
Jobless claims were 209,000, that is -24,000 claims less than the week before (233,000 claims).
It is also lower than market expectations of 225,000.
Does it imply falling inflation has enabled employers to hire more, leaving less unemployed to file for claims? What do you think?
Given the uncertain and mixed environment, it is hard to predict the direction of the stock market for this week.
Based on my analysis, I would still keep an eye on $Amazon.com(AMZN)$.
Amazon has an amazing run in 2023, so far.
Its stock price has arisen +70.99%, YTD.
The e-commerce giant is expected to report strong revenue growth for the Q4 2023. (see below)
US holiday sales is expected to gain pace this year. (see above)
With the start of the Black Friday and year end shopping season in full swing, driven by its Prime Day sales event, Amazon is expected to improve its retail revenue.
During its Q3 2023 earnings report’s outlook for Q4 2023, Amazon forecasted a revenue of $160 Billion to $167 Billion.
This would represent a growth of +8.5% to +9.6% YoY.
This implies that Amazon expects to maintain or increase its sales momentum in the coming quarter, which includes the holiday season and other shopping events like Cyber Monday and Prime Day.
Amazon has other positive sparks left in 2023:
It expansion into new markets eg. Singapore.
Its launch of new products and services like Amazon Pharmacy and Amazon Luna.
Its continued investment in innovation and sustainability.
Amazon is also expected to benefit from the increased demand for online shopping and delivery.
Do you think US market will consolidate this week until after the Core PCE report is out?
Do you think Amazon is still a Buy? I do !
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