If there one company that benefits from a stay at home order across the country and world it is Amazon, reports Fiona Cincotta.

The number of global Coronavirus cases has reached 1 million. Europe, With the exception of Sweden, Europe is on lock down and state by state, the United States is imposing stay at home directives. These lock down and social distancing measures have cause demand for goods and services to evaporate overnight. Millions of businesses are collapsing.

Within this mayhem, there are some stocks which are outperforming the market, Amazon (AMZN) is one of them.

E-commerce

E-commerce was already a big business before Coronavirus. However, Amazon has been a lifeline for many in isolation and this will have boosted the company’s sales significantly. Business is booming. The e-commerce powerhouse has announced that it will take on an additional 100,000 workers to staff its fulfilment centers and delivery operations.

Amazon Prime / AWS / Prime Music

It’s not just the online shopping area of the business that stands to benefit from lock down. Amazon Prime’s online Video service and Prime Music are seeing an increasing number of customers. The Amazon Web Services, the leader in cloud services is also helping many businesses work through the Coronavirus crisis.

There is a good chance that the lock down period will have changed many people’s habits. It will have opened up a new way of shopping or streaming for many people. Those that have created accounts for Amazon Prime, Video and Music could well keep the services even after coronavirus passes.

Latest Results

Amazon had a phenomenal year in 2019, without any lock down. Sales jumped 20% to $281 billion; earnings per share (EPS) shot up 14% after the firm invested heavily in one day shipping. Amazon’s balance sheet is also impressive with $55 billion in cash and $23 billion in long term debt. There are plenty of reserves to weather any economic slowdown.

Levels to watch

Since the coronavirus induced sell off took hold mid-February the broader US market, the S&P is trading down 24%. Amazon is down just 8%. Since its March low, the S&P has rallied 15% whilst Amazon has jumped 19% over the same period (see chart).

amazon

EUR/USD to $1.0640?

The Euro is falling lower versus the US Dollar for the fifth straight session on Friday. The pair is currently trading 0.3% lower, putting EUR/USD on track for losses in the region of 2.7% across the week.
The Euro has been on the back foot across the week, which is not that surprising considering the devastation that coronavirus is having across the region. Whilst Italy, and possibly Spain have peaked in terms of daily deaths, the impact on the economies is only just starting to show through.

Jobless claims

Spain, which has over 102,000 coronavirus cases and a death toll of over 10,000 has been on lockdown since mid-March. The restrictions placed on the public have resulted in a huge demand shock to the economy causing many businesses to lay off staff or collapse. Spain reported its biggest rise in jobless claims ever; 800,000 people lost their jobs in Spain last month alone.

France also reported 4 million had applied for temporary unemployed benefits, this accounts for around 20% of France’s private sector workforce. The numbers are petrifying.

Service sector PMI

Service sector PMI revisions in Europe are expected to be dire. The final revision for the Eurozone is expected to drop to 28.2, down from 28.4; confirmation that the eurozone economy has grinded to a halt. Meanwhile Italy’s PMI could serve as a warning of what’s to come, with service sector activity expected to plunge to just 22.5 in March, down from 52.1 in February. Evidence of a paralyzed economy as lock down continues.

No coronabonds

Political leaders failing to agree over economic relief for the Coronavirus crisis is adding pressure to the Euro. Whilst Spain, France and Italy, along with other member states are seeking a coronabond – issuing joint European debt, Germany strongly opposes. The EC along with European finance ministers are trying to find a compromise. Without a solution the euro has room for further losses.

Levels to watch

EUR/USD is trading 0.3% lower and remains below the descending trend line. A break above $1.0910 could negate the current downward trend on 4 hour chart. Southwards is the path of least resistance.
Immediate support can be seen at 1.0823 (daily low) prior to $1.0745 (low 24th March) before $1.0640 (low 23rd March).

Resistance can be seen at $1.0864 (daily high) prior to $10910 (trendline) and $1.0965 (high 2nd April)

Levels to watch

Fiona Cincotta is a Market Analyst for Currency Live