1. Amazon Stock..Cost of Shipping Jumps 46% Year Over Year….Stock Never Made New Highs From 2018

Amazon earnings fall for first time in more than two years, stock drops in late trading

Amazon’s spending on one-day delivery and other initiatives sends profit down year-over-year for first time since 2017, forecast calls for even more spending in holiday quarter

Johannes Eisele/AFP/Getty Images

Amazon.com Inc. has spent more than $1 billion this year to reduce the amount of time it takes to deliver packages to Prime customers, and expects a $1.5 billion hit in the holiday season.

JEREMYC. OWENS

Amazon prepped investors and analysts for the spending increase and resulting profit decline, projecting an $800 million charge in the second quarter for the one-day delivery change. Amazon ended up spending more than that in the second quarter, however, and Chief Financial Officer Brian Olsavsky said in July that Amazon would spend even more in the third quarter.

Olsavsky said in the call that the fourth quarter will see even larger costs from one-day delivery efforts.

“So, as we head into Q4 we’ve added what’s just nearly $1.5 billion penalty in Q4 year-over-year for the cost of shipping, which essentially is transportation costs, the cost of expanding our transportation capacity, things like adding additional roles and shifts in our warehouses,” the Amazon CFO said.

Amazon’s worldwide spending on shipping jumped 46% year-over-year in the third quarter to a record $9.6 billion, more than a half-billion dollars over what Amazon spent in the busier holiday season a year ago. The company, which cut back on hiring a year ago after absorbing the Whole Foods workforce and hiring quickly in 2017, also increased its total employee count by 22% to 750,000 people. Amazon added nearly 100,000 employees just in the third quarter, according to Thursday’s release, which Baird analyst Sebastian deemed the “most surprising metric” in the report.

https://www.marketwatch.com/story/amazon-earnings-fall-for-first-time-in-more-than-two-years-stock-drops-in-late-trading-2019-10-24?mod=home-page

1. B Rated Junk Bonds Spread

“It’s Different This Time” Takes Root in the Junk-Bond Market Amid Parallels to Post-Lehman 2008

by Wolf Richter • Oct 23, 2019 • 32 Comments • Email to a friend

And so far, so good. https://wolfstreet.com/2019/10/23/junk-bond-market-happily-blows-off-warnings-its-different-this-time-takes-root/

1.S&P Earnings So Far…-3% Year Over Year.

With 19% of companies reported, S&P 500 earnings down 3% year-over-year, slowest growth since Q1 2016.

DAVE LUTZ AT JONES TRADING

1.Emerging Markets Earnings Estimates Increasing.

The earnings outlook in the U.S. is darkening, but the view from developing markets is perking up. The ratio of earnings estimates between the S&P 500 and the MSCI Emerging Markets is at the lowest since early August. Optimism of an end to the trade war is sending EM stocks and currencies toward their second monthly advance.

1. Housing and Recessions

by Calculated Risk on 10/15/2019 11:32:00 AM

Now that new home sales have reached a new cycle high (in June), I’d like to update a couple of graphs in a previous post (most of this from an earlier post).

For the economy, what we should be focused on are single family starts and new home sales. As I noted in Investment and Recessions “New Home Sales appears to be an excellent leading indicator, and currently new home sales (and housing starts) are up solidly year-over-year, and this suggests there is no recession in sight.”

For the bottoms and troughs for key housing activity, here is a graph of Single family housing starts, New Home Sales, and Residential Investment (RI) as a percent of GDP.

Read more at https://www.calculatedriskblog.com/2019/10/housing-and-recessions.html#rqPIhycXiXK7Bvcy.99