Myer’s Amazon Fight Back

Myer’s Amazon Fight Back
  • The battleground is couriers and logistics…
  • Two giants of Wall Street speak out
  • From bonds to stocks…

Holy moly, check this out…

You know I’ve been banging the drum hard recently to argue Amazon coming to Australia will force retailers to invest in their logistics and delivery to compete.

Well, the team down at Myer are now whispering the same thing…

The Australian Financial Review reported yesterday that Myer is not ruling out launching a subscription style service like Amazon Prime.

I tell you, this stuff could really run in the next 12 months.

Here’s a snippet:

Myer’s chief digital officer, Mark Cripsey, said the department store retailer is positioning itself to benefit from Amazon’s Australian expansion by taking advantage of the anticipated growth in online retailing and the inevitable shake-up in logistics and courier services.

While retailers would struggle to beat Amazon on its core strengths of range, price and fulfilment, customer expectations would rise and retailers needed to lift their game and leverage their strengths to meet those expectations, he said.’

Notice one of the key battlegrounds is exactly where I’ve put it previously: Free and fast shipping.

Myer is not the first and won’t be the last retailer to realise it needs to up its game here.

I expect a rolling period where articles like this appear every other week.

I’ll keep drilling the same point: there’s a jackpot for any firm that can cash in on this uplift in online delivery.

Go here for the $1 ASX stock I think could do exactly this.

But that’s not all when it comes to Amazon.

Apparently over in the USA Amazon is building a real estate agent referral service.

You don’t even have to do a web search or pick up the phone…you just ask its Amazon Echo (Aleska) to make an appointment with a top agent in your area.

It will go looking for them on Amazon’s marketplace.

That means real estate agents are going to need a presence on Amazon. And they better be good at their job because it will be ever harder to hide in an era of open data and customer reviews.

Amazon will affect many different industries in different ways. You just have to be following this trend.

And now there’s another big one I’m watching…

Two giants of Wall Street speak out

It’s called the US dollar!

The greenback has been in a downtrend for most of this year. The New York Times says the USD has lost nearly 8% against a basket of currencies since the beginning of 2017.

The writer in the NYT seems to be suggesting that the world is losing confidence in the ‘haven’ status of the dollar because of President Trump’s ranting and erratic behaviour.

Such an explanation looks a bit easy for me. But who knows? Certainly not me.

I have precisely zero experience trading currencies, or even predicting them. But I do know two pretty shrewd operators on the Street are Jeff Gundlach of Double Line Capital and Jamie Dimon of JPMorgan Chase.

Dimon has come out and said he wouldn’t buy a ten year government bond anywhere in the world. That means he thinks interest rates are on the way up. Bond prices fall when rates go up.

Gundlach agrees with him, and thinks the US dollar will rally alongside this. Gundlach has the best track record (that I am aware of) calling turns in the US government bond market.

It’s something to watch. It might take a bit of heat out of the Aussie dollar if these gentleman are right. That could give any company that benefits from a falling Aussie dollar a tailwind. Australian miners spring to mind here!

It also suggests that these two see the US economy getting stronger, despite the worry over the US Federal Reserve withdrawing its ‘stimulus’.

Personally, this is not something that bothers me. I see an expansion in the US banking sector that could more than compensate for this.

Gundlach suggests this could see volatility return to the US stock market. There’s been precious little of that lately, so that’s no great big call, I suppose.

However, any money diverted from the bond market could find a home in the US stock market, too.

And that’s yet another tailwind that could send the US market up, if with plenty of dips and rallies along the way.

Best wishes,

Callum Newman
Editor, The Daily Reckoning Australia