Marketbites: FTC Sues Amazon
MARKET PERFORMANCE:
Portfolio Manager Commentary:
Stocks fell Wednesday as investors took a breather from last week’s market rally, and considered Jerome Powell’s latest comments on inflation. Some major tech stocks that enjoyed an extraordinary run because of enthusiasm around artificial intelligence pulled back. Amazon shares dropped about 0.8% after the Federal Trade Commission on Wednesday sued the online retailer. The agency alleged that Amazon fooled millions of shoppers into signing up for Prime, and then hindered their attempts to cancel. Nvidia, which is up nearly 200% this year, slid 1.7%. Shares of Google-parent Alphabet and Netflix were each down by more than 2%.
Elsewhere, FedEx shares fell more than 2% a day after the shipping giant posted weaker-than-expected revenue for its most recent quarter. Winnebago shares slid nearly 1.3% after the motorhome maker missed third-quarter revenue estimates.
Stocks are taking a pause from the exuberance of the recent rally. Last week, the S&P 500 hit its highest level since April 2022 and posted its fifth consecutive positive week.
Chart of the Day:
Alibaba Group named Brooklyn Nets owner Joe Tsai to be its chairman, putting the close ally of fellow co-founder Jack Ma atop the Chinese e-commerce giant as it seeks a revival from sluggish growth amid fierce competition. Tsai is well-liked by investors and his appointment should be seen as good news, said Vey-Sern Ling, a senior adviser for Asia technology stocks at Union Bancaire Privée. But the move is unlikely to boost Alibaba’s stock price, which is suffering as a result of geopolitical issues and concerns over China’s economy rather than any questions about management, Ling said.
Alibaba’s market capitalization topped $850 billion at its peak in late 2020, but had plummeted to about $238 billion before the leadership change was announced. The company’s New York-listed American depositary receipts were down 2% in U.S. premarket trading on Tuesday.
Source: WSJ
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