DiscoverGold
2 주 전
2 Big Tech Stocks Dinged by Downgrades
By: Schaeffer's Investment Research | October 7, 2024
• Both AAPL and AMZN were downgraded this morning
• Both AMZN and AAPL have seen high options volume over the last two weeks
Tech giants Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) are both moving lower today, following this morning's bear notes.
Jefferies downgraded AAPL to "hold" from "buy," noting near-term expectations for the company's iPhone 16 and iPhone 17, both marked by artificial intelligence (AI) software, were overblown after weaker-than-anticipated initial demand. At last glance, Apple stock was down 0.9% to trade at $224.76.
Wells Fargo slashed its rating on AMZN to "equal weight" from "overweight," citing slowing growth and heightened competition from Walmart (WMT), warning cloud strength was "not enough." At last look, Amazon.com stock was down 2.8% to trade at $181.29.
Both stocks are no stranger to Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest options volume in the last 10 days, and this most recent period is no different. Over the past two weeks, both equities have seen a wealth of bullish-leaning trading, as seen in the chart below.
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tw0122
1 월 전
"It Changes The Math": Biden's Tariff Crackdown Throws Amazon And Walmart's Sneaky China Plans Into Chaos
Under mounting pressure from Chinese retail giants like Shein and Temu, American behemoths Amazon and Walmart have been cooking up a scheme to dodge tariffs and slash costs - but a new move by the Biden administration might just rain on their parade.
For months, these U.S. retailers have been quietly plotting to overhaul their business models, aiming to ship more goods directly from Chinese factories straight to your doorstep. By doing so, they'd cut out pricey U.S. warehouses and stores, all while skirting hefty tariffs using a little-known loophole in a century-old trade law.
Amazon has been preparing a new discount service that would ship products directly to consumers, allowing those goods to bypass tariffs.Credit...Octavio Jones for The New York Times
This loophole, known as "de minimis," lets importers bypass U.S. taxes and tariffs on shipments valued under $800. The result? Chinese platforms like Shein and Temu have been flooding the market with dirt-cheap products, leaving American companies scrambling to keep up.
But on Friday, the Biden administration threw a wrench in the works. In a surprise announcement, officials declared plans to slam the door on many Chinese imports exploiting the de minimis rule—especially clothing items. The crackdown aims to curb the tsunami of duty-free packages pouring into the country, predominantly from China.
While the changes won't happen overnight - the proposal will undergo industry scrutiny before finalization - the message is clear: The free ride is coming to an end, the NY Times reports.
Amazon had been gearing up to launch a discount service capitalizing on direct-to-consumer shipments from China, insiders revealed. Walmart, even if reluctant to shake up its model, felt the heat to consider similar tactics to stay competitive.
"It's get on board or get left behind," said Steve Story, executive vice president for customs and international trade at Apex Logistics International. "If you don't get online and embrace this, you're going to be overshadowed by Shein, Temu, and Alibaba."
Story admitted he's assisted Chinese sellers in dodging tariffs by shipping through Amazon's fulfillment centers, thanks to a 2020 customs ruling allowing Chinese firms to act as "non-resident importers." Essentially, they can send products tariff-free to themselves via Amazon warehouses scattered across the U.S.
Traditionally, retailers hauled shipping containers loaded with goods from China to U.S. ports, then trucked them to warehouses and stores before reaching consumers. Now, many are bypassing this route, opting to individually package and ship items directly from China under the de minimis rule. This method not only avoids tariffs but also skirts the need for extensive warehousing.
The numbers are staggering. Packages entering the U.S. under the de minimis rule have skyrocketed to over one billion in 2023, up from a mere 140 million a decade ago. China is the chief contributor, sending more packages than all other countries combined.
American businesses are pissed - saying that the rules create an uneven playing field since brands with U.S. stores and warehouses are subject to more in tariffs compared to those shipping directly to consumers.
"De minimis is like a big tax incentive the U.S. is giving you to take the job somewhere else," lamented Peter Bragdon, general counsel at Columbia Sportswear. "It changes the math."
Mike Hesse, CEO of Nebraska-based Blue Ox, which manufactures tow bars for RVs, discovered Chinese knockoffs of his products being sold on Amazon and slipping into the country via de minimis.
"They're a safety issue, plus consumers are duped into thinking they're buying an American-made product," Hesse fumed. "That's how de minimis is affecting me."
Traditionally, to bring goods into the country, retailers would arrange for a shipping container of products to be brought into U.S. ports from overseas.Credit...Kristen Zeis for The New York Times
Some companies have accused Chinese firms of dirty tricks, like falsifying invoices to sneak pricier items under the $800 threshold or faking shipping documents to send bulk goods duty-free.
Meanwhile, some retailers have shifted warehouses to Canada or Mexico. From there, they can swiftly and legally ship items duty-free into the U.S. when orders roll in - taking more American jobs with them.
As the Biden administration tightens the screws on de minimis shipments from China, fears are mounting that imports from our neighbors might surge as companies look for new loopholes.
Even Chinese giants are bracing for impact. Shein says it's open to reforming the tariff exemption and will adapt to keep customers happy. Temu has started highlighting products from "local warehouses," a move seen as hedging against regulatory changes.
"This is clearly a strategic move to limit exposure to any regulatory shifts," noted Juozas Kaziukenas, founder of e-commerce intelligence firm Marketplace Pulse.
All eyes are now on Washington. While lawmakers on both sides of the aisle have floated proposals to narrow the de minimis exemption, it's uncertain whether they'll rally behind a unified plan.
"The reason we really would like to see certainty is so everybody can plan business accordingly," said Donald Tang, executive chairman of Shein, just a day before the administration's bombshell announcement. "If everything is hanging in the middle... it's not good for the business planning process."
For Amazon, Walmart, and countless others, the race is on to adapt—or risk being left in the dust.
tw0122
1 월 전
Consumer demand slowing significantly Amazon Mandates Office Return
Amazon has announced a new policy requiring its corporate employees to work from the office five days a week.. This shift marks a significant change from the company’s current three-day hybrid model. According to Amazon CEO Andy Jassy, in-person work fosters collaboration, innovation, and the company’s sense of culture.
This move makes Amazon one of the strictest return-to-office policy holders among Seattle’s tech giants, although some companies have been gradually increasing in-person requirements recently. The new policy aims to promote a sense of community and teamwork, which Jassy believes is essential for Amazon’s success.
The change comes as more companies are pulling back on remote work, and Amazon’s decision may set a precedent for other Big Tech companies to follow. Other executives, such as Elon Musk and Marc Benioff, have also advocated for a return to pre-pandemic norms of office culture.
It remains to be seen how employees will respond to this new policy, as some may have grown accustomed to the flexibility of remote work. However, Amazon’s move is a significant development in the ongoing debate about the future of work and the role of offices in the modern workplace.
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