Market Commentary - June 2016

Less market commentary this month and more of a short economic commentary. 

Over the past several years much has been made about the slow down in mall traffic and its impact on the US retail industry. Retailers like Macy's, Nordstrom, Target, Kohl's, and JCPenny have reported slower sales, limited growth opportunities and weaker guidance. Since these "numbers" are an important facto in many economic calculations it can appear the US consumer is not spending and the US economy continues to be slower compared to historic numbers

Some of the retail malaise could be due to a soft economy but the reality is the shift to online shopping has been massive. Most people know this already but just to put the growth in perspective if we talk out 2008 and 2009 online sales have increased by a minimum of 14% annually and surpassed $300 billion in 2015. It is also no secret where most of this shopping happens. In fact you probably have Amazon open in one of your browser tabs right now. In fact it is becoming more probably that you have Amazon open on your phone's browser or you have the app installed. 

It isn't just in the US, either. Alibaba is enormous and makes some of Amazon's statistics look small. 

For many years economists looked at Walmart as a barometer for economic health but the time has come to look at Amazon as a barometer as well. Walmart is still the largest private employer in the world so there are still many great things to be gleaned from them statistically. But to  judge the US consumer do we need to look any further than Amazon? Or your neighborhood doorstep?