Stock Market Forecast:
- Amazon’s annual Prime Day event runs from June 21 to June 22 this year
- The retailer has created an event that sees its sales surpass Black Friday and Cyber Monday combined
- Prime Day can also offer insights into consumer trends, demand and discretionary spending
Stock Market Forecast: Amazon’s Prime Day is Making Retailer History
While the broader stock market juggles macroeconomic uncertainties and monetary policy concerns in the week ahead Amazon shareholders and Prime members have their eyes on another type of event with the arrival of the retailer’s “Prime Day” event from June 21 to June 22.
Surveying the Amazon – The Public’s Views on Amazon
The event window sees steep discounts across Amazon’s site and has been a resounding success in recent years as Prime Day sales have begun to eclipse the combined totals of Black Friday and Cyber Monday. To be sure, Black Friday and Cyber Monday remain larger consumption periods for the broader economy, but Amazon’s ability to create a spending event in which it has sole ownership of is unique compared to major competitors like Walmart and Target.
Amazon’s Prime Day: History in the Making
Source: TradingView, Amazon Prime Day
Beginning in 2015 on Amazon’s 20th anniversary, Prime Day kicked off with discounts for members and captured roughly $900 million in sales in its inaugural run that lasted just 24 hours. The event has since expanded to a 48-hour period and topped $10 billion in sales for the first time in October 2020 despite the ongoing pandemic that upended the global economy. With renewed consumer demand and healthier supply chains, Amazon may be poised for a record-breaking sales total in 2021 that could help spark a breakout in its stock price.
That said, there is little concrete evidence to be gleaned from the Hallmark-like holiday’s influence on the company’s share price given the few occurrences and the broader uptrend AMZN has enjoyed in the last 10 years. As it stands, AMZN has been trapped in a relatively tight trading range since September 2020 and broader seasonal headwinds could make a breakout difficult to establish.
Either way, Amazon’s ability to invent a holiday that sparks demand for Prime membership, the use of its online platform, its own products and the products of licensed third-party sellers is a pretty unique feat for a retailer. Further still, the chain of events culminates in a purchased product being delivered by the company’s vast carrier network. Suffice it to say, it is easy to see how Amazon is facing growing calls for antitrust regulation.
Regardless, the spending spree masquerading as a holiday will not only help Amazon in its quest to outperform competitors and capture market share, it may also offer insights into the broader economy and the health of consumers. Given the ongoing recovery from the coronavirus, a strong sales figure at the end of this year’s Prime Day could suggest global consumption is back on the rise.
The latest US retail sales figure disappointed so investment analysts and market participants will be eager for another offering of data as they look to elucidate consumer demand heading into the summer months. The final tally might also speak to the ongoing inflation and taper talk debate after Fed Chairman Jerome Powell announced we have entered the taper-talk window.
To that end, a disappointing Prime Day tally could give pause to those suggesting the economy is roaring back to pre-pandemic levels which could have a knock-on effect for larger macroeconomic conversations – although Prime Day totals are hardly official figures from the Fed. As Prime members, savvy consumers and Amazon shareholders await this year’s Prime Day, follow @PeterHanksFX on Twitter for updates and analysis.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX