The Russell2000 small cap index is breaking down, and yesterday closed at the low, breaking down from a 3 month sideways topping formation; clearly there is divergence across equity indices. AMZN’s results yesterday were disappointing, and as colleague JA notes, the move to brick and mortar seems misguided. The stock p/e is around 200…hard to maintain with delivery vans and physical stores. I would also mention that its market cap is around $390b or about 2% of GDP. (Total equity mkt cap to GDP is about 120%). Who is AMZN selling to? The people that own and work for companies in the Russell index. Sure, I’m simplifying, but the divergence between big tech and the rest of the market/economy is stark.
–I can’t help but include this snippet. A Tesla car was defaced in the most “San Fransisco crime ever”. Someone spray painted the car with Tesla’s after hours stock price. http://www.sfgate.com/crime/article/Tesla-defaced-in-most-San-Francisco-crime-ever-10417569.php?utm_source=fark&utm_medium=website&utm_content=link&ICID=ref_fark
–Interesting piece from Bloomberg: Charts that scare Wall Street. Well worth review.
http://www.bloomberg.com/news/articles/2016-10-27/these-are-the-charts-that-scare-wall-street
