Bulletin
Investor Alert

Need to Know Archives | Email alerts

Oct. 25, 2017, 9:55 a.m. EDT

These look like winners in retail shakeout -- and it’s not just Amazon and Wal-Mart

Critical information for the U.S. trading day

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Walmart Inc. (WMT)
  • X
    Amazon.com Inc. (AMZN)
  • X
    FedEx Corp. (FDX)

or Cancel Already have a watchlist? Log In

By Barbara Kollmeyer, MarketWatch


Reuters
Amazon a king of e-commerce

Earnings and politics. That’s where the thrills are being found for this stock market right now.

Signs of a disharmonious GOP have some worried, with Sen. Jeff Flake the latest GOP member to cross POTUS. Some fear that growing political strife could hinder the passage of Trump’s tax plan and put this rally in peril.

Or will it? This market is pretty good at taking bad news and relegating it to the Upside Down, betting that lurking dangers won’t bust through.

Our call of the day offers a reprieve from calling the ups and downs of this market, as it lays out yet another reason to stick with two of the biggest names in retail when it comes to the future of e-commerce.

In a note to clients, Edward Yruma and a team of analysts at KeyBanc Capital laid out what they see happening — “e-commerce to continue to grow low double digits to mid-teens over the next five years.” But that won’t be without its challenges, as rising industrial real estate rents and delivery costs mean “box to home” delivery will get a rethink.

“We believe a combination of cost pressures and consumer behavior is leading retailers to more closely integrate stores and e-commerce operations. We think ‘digitally driven’ growth will increasingly involve a consumer pickup component,” said Yruma and the team.

As for who is ready to meet this challenge, Wal-Mart /zigman2/quotes/207374728/composite WMT -0.21% is “one of the best positioned retailers in an omnichannel environment and is one of the only traditional retailers innovating at a pace even remotely close to Amazon,” say the KeyBanc analysts. (“Omnichannel” basically means able to link up online, bricks-and-mortar and mobile shopping so they appear seamless to the customer.)

Another winner? Amazon /zigman2/quotes/210331248/composite AMZN -0.74%  , as KeyBanc says its Whole Foods acquisition gives the e-commerce pioneer much-needed physical outlets.

On the transportation and logistics side, they like FedEx /zigman2/quotes/203047719/composite FDX -1.22%  and XPO /zigman2/quotes/205483484/composite XPO -1.01%  . On the paper and packaging side, KeyBanc points to Graphic Packaging /zigman2/quotes/203517136/composite GPK -1.90%  , the U.S. boxboard producer.

And as retailers look to modernize their supply chains further, to get ship-from-store and in-store pickup nailed down, they might look to big business software from Oracle /zigman2/quotes/202180826/composite ORCL -0.99% to get the job done.

Read: Why worry? 7 troubling signs for the stock market

Key market gauges

The Dow /zigman2/quotes/210598065/realtime DJIA -0.48%  , S&P 500 /zigman2/quotes/210599714/realtime SPX -0.91%  and Nasdaq /zigman2/quotes/210598365/realtime COMP -0.91%  are off to a slow start. Gold is at nearly three-week lows and crude are softer.

Read: How oil is escaping from ‘purgatory’ as supply glut turns to supply concern

In Asia /zigman2/quotes/211618636/realtime XX:ADOW +0.35% , the Nikkei /zigman2/quotes/210597971/delayed JP:NIK +0.58%  broke a record-smashing win streak. Europe stocks /zigman2/quotes/210599654/delayed XX:SXXP -0.88%  are wavering in an earnings deluge.

See the Market Snapshot column for more.

The dollar /zigman2/quotes/210598269/delayed DXY +0.34%  is mostly up on bets over the next Fed Chairman. The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.3315%  will be a big focus Thursday due to an ECB meeting, where a hawkish surprise could push it to $1.23.

Read: Why Italy will be the biggest loser when the ECB starts tapering

The chart

Investors have been obsessing about the wrong impending crash, says Bill Blain, who runs the capital markets division at brokerage Mint Partners.

“While everyone is watching the stock markets looking for a bubble to burst, or stressing about Europe, the real risk is probably complete mayhem in bond markets,” he says in a post on Blain’s Morning Porridge .

He cites research by Mint’s macro economist Martin Malone, who says the 36-year-old bull market for 10-year Treasurys /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +2.68%  ended in August. Malone looked at 700-year bond-market cycles, nominal rates and inflation, and found the average length of nine nominal bull markets has been 32 years. Bear markets last 26 years on average.

Here’s his chart of the last 60 years’ bond cycle:

Blain says they’re looking for Treasurys to spike at least 100 basis points in the medium term, which would mean trouble for corporate bonds. But in the long run, it is good news for stocks, because investors will be seeking alternative investments, he says.

/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 144.73
-0.30 -0.21%
Volume: 24.35M
Sept. 17, 2021 4:00p
P/E Ratio
40.79
Dividend Yield
1.52%
Market Cap
$404.42 billion
Rev. per Employee
$243,109
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,462.52
-25.72 -0.74%
Volume: 4.62M
Sept. 17, 2021 4:00p
P/E Ratio
60.35
Dividend Yield
N/A
Market Cap
$1766.59 billion
Rev. per Employee
$297,430
loading...
/zigman2/quotes/203047719/composite
US : U.S.: NYSE
$ 255.22
-3.16 -1.22%
Volume: 3.09M
Sept. 17, 2021 4:00p
P/E Ratio
16.81
Dividend Yield
1.18%
Market Cap
$68.78 billion
Rev. per Employee
$289,945
loading...
/zigman2/quotes/205483484/composite
US : U.S.: NYSE
$ 83.11
-0.85 -1.01%
Volume: 2.15M
Sept. 17, 2021 4:00p
P/E Ratio
20.06
Dividend Yield
N/A
Market Cap
$9.62 billion
Rev. per Employee
$159,333
loading...
/zigman2/quotes/203517136/composite
US : U.S.: NYSE
$ 19.14
-0.37 -1.90%
Volume: 4.10M
Sept. 17, 2021 4:00p
P/E Ratio
24.22
Dividend Yield
1.57%
Market Cap
$5.99 billion
Rev. per Employee
$349,395
loading...
/zigman2/quotes/202180826/composite
US : U.S.: NYSE
$ 86.39
-0.86 -0.99%
Volume: 58.07M
Sept. 17, 2021 4:02p
P/E Ratio
18.35
Dividend Yield
1.48%
Market Cap
$238.91 billion
Rev. per Employee
$306,659
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,584.88
-166.44 -0.48%
Volume: 577.97M
Sept. 17, 2021 5:25p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,432.99
-40.76 -0.91%
Volume: 3.79B
Sept. 17, 2021 5:25p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
15,043.97
-137.96 -0.91%
Volume: 6.16M
Sept. 17, 2021 5:16p
loading...
/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,979.73
+13.91 +0.35%
Volume: 0.00
Sept. 17, 2021 12:48p
loading...
/zigman2/quotes/210597971/delayed
JP : Nikkei
30,500.05
+176.71 +0.58%
Volume: 0.00
Sept. 17, 2021 3:15p
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
461.84
-4.11 -0.88%
Volume: 0.00
Sept. 17, 2021 11:03p
loading...
/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
93.25
+0.31 +0.34%
Volume: 0.00
Sept. 17, 2021 4:59p
loading...
/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1727
-0.0039 -0.3315%
Volume: 0.0000
Sept. 17, 2021 4:59p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.37
+0.04 +2.68%
Volume: 0.00
Sept. 17, 2021 4:58p
loading...
1 2
This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.