May 16, 2022, 11:27 am EDT
How is the retailer doing?
US retailer counts for about two-thirds of the GDP. Thus, the performance of the retailers determines the direction of the US economic direction. What do you think how the retailers are doing this year after the double digits increase in costs from food, gasoline, and almost everything you need in 2022? The picture does not look pretty.
Not only do US residents suffer the increase in inflation, but other developing countries even feel more pain from this hyperinflation environment. This is the main reason that online retailer king Amazon (AMZN) -2% kept going down after the breakdown on 04/29 with -14% loss after the earnings report. We can see from the Bubble chart for Nasdaq-100 that AMZN is still down with higher volume today which is a bearish signal.
The other retailer titanic Apple (AAPL) -1% also plays a major role in providing a hint for the US economy and its 2022 Q2 GDP. Last time Q1 GDP dropped below the zero line to -1.4%. If Q2 shows other negative numbers in GDP, then the US formally gets into the recession by definition.
Today is about the middle point of Q2 2022. It will be important for us to think about this question: how the retailer is doing?
Business re-opening in the post-COVID-19 period helps a lot to travel, hotels, restaurants, shopping, vacations, etc. However, inflation also threats consumers about shrinking budgets for unnecessary spending.
We think retailers are at risk of falling further into trouble in the second half of 2022. Let’s keep watching what markets want to tell us about retailers’ performance.