Once again the Prez lurking over Amazon (AMZN).
Tech shares fell on Wednesday for a second day, led by Amazon.com Inc., which slid 4.3% on a report that Donald Trump wants to go down the online trading giant. It's another day when the President's message blocks the good news that his policy has delivered to shareholders of US corporations.
The Amazon news tended to obscure news that GDP rose faster than expected in the fourth quarter; consumption, the largest part of the economy, grew 4% instead of the expected 3.8%; and that pre-tax earnings grow faster than Wall Street estimates. All of these positive numbers stem from Trump's tax cuts, his government's determination to revoke or lift regulations, and the ongoing attack on the labor movement.
The fundamentals of a prosperous corporate environment are all around us, but it has become difficult to hold this story for all the distractions, including the President.
"While there is no lack of noise that distracts investors, … an upward revision (of GDP) should remind us that economic fundamentals have weight and remain strong," said Mike Loewengart, vice president of investment strategy at E * Trade Financial Corp.
Faced with this reality, pharmaceutical companies and consumer stocks, led by Merck (MRK), Pfizer (PFE) and Proctor & Gambling (PG), rose today. But Trump does not seem to be alone enough.
While it can be believed that the President's attacks on Amazon's Action Alerts Plus reflect a sincere desire to mitigate inefficiencies or inefficiencies in retail antitrust issues, Internet taxes or postage, it's also worth noting that the President knows that Amazon boss Jeff Bezos, one of the richest people in the world, also heard the Washington Post, one of the newspapers that covers the nation's capital. Trump is not a fan of the post, which he often criticizes for publishing "fake news."
So, while Trump is just trying to fake some of his Twitter readers, investors have had to worry a bit and have dropped Amazon's stock.
That does not mean that President Trump is actually planning to do anything against Amazon. On the one hand, it would be necessary to set in motion federal authorities to initiate antitrust investigations. A friendly collaboration with the Justice Department of Jeff Sessions has not been one of Trump's strengths.
It was the same with Trump's threats of enforcing global steel tariffs, which basically led to nothing. The stock market drew its attention last week to news that the new tariffs would affect relations with key trading partners such as Canada, Mexico and South Korea. Instead, these countries were exempted from the new levies.
Part of the reason the Dow lost 1,100 points in two days last week was the fear of a China trade war. But it turns out that the $ 50 billion in China-targeted taxes is a miserable part of the entire US-China trade network, easing fears on the market.
Still, the unpredictable Commander-in-Chief retains the ability to shock and move markets. If the strength of a nation's currency, in a sense, reflects investor confidence in the nation's economic outlook, then the falling dollar is not a positive sign. The same applies to US debt, where prices are falling and yields are rising as concerns about where the US is heading are growing.
Some of you dollar-cost averages out there might consider buying the ever-cheaper 10-year US Treasury bonds. It is almost possible that Trump will one day leave the office and the securities will recover.
Action Alerts Plus, which hold Facebook (FB) stocks, rose a bit today as investors demand a business model that demands of its clients for a Big brother-monitoring state still has some legs, though CEO Mark Zuckerberg who holds all the voting rights, leaves the stockholders no choice but to see what happens. This is a stock on which corruption, scandal and incompetence do not emanate from the banks of the Potomac.