It only works if you work
-Chinedu Iwuaba
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Markets
The bull market ended before it ever got going. After coming close to new all-time highs, the Stock Market is down nearly 5% in the last month. Pressures from higher oil prices and Papa Powell saying he might increase rates have caused investors to flee from the markets in the last month.
September Stock Return
Year-To-Date Returns
This newsletter is 1,438 words a 7-min read
Tale of the Tape
Economy
United States vs. Amazon
Another week, another lawsuit against one of the Big Tech Companies. It has been a long time since we have had the political will to go against large corporations in the US.
🔍Details: The Federal Trade Commission (FTC) and 17 states are suing Amazon for anticompetitive (being an illegal monopoly) behavior. This is the fourth time the FTC has sued Amazon this year. This time the FTC is bringing the big guns. The accusations are as follows, according to the AP:
Amazon hides seller products if it finds the products being offered for a lower price on other sites. The state of California was already suing Amazon for a similar reason
Amazon then charges higher fees to sellers which forces sellers to raise prices not only on Amazon but on all shopping sites
Amazon replaces relevant search results with paid advertising, favoring its own brand (Amazon Basics) over other products
Amazon compels sellers to use its logistics service to make their product Prime-eligible, although many sellers would prefer to use alternative services.
💬In Her Words: FTC Chairman Lina Khan said in a statement, “The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them.”
My inner thoughts: Okay Lina, I hear you but haven't you hated Amazon for like forever? Is this just a vendetta?
💬In Their Words: Amazon General Counsel David Zapolsky said in a statement, “If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses — the opposite of what antitrust law is designed to do.”
My inner thoughts: Sure David SURE, that's what all monopolies say.
Takeaway: A lot of what is in the lawsuit is not false. We have all experienced the prices of Amazon going up and that Amazon is typically not the best price. However, it is the most convenient option.
Sellers have been complaining for a few years about costs on Amazon and the feeling of having to opt into Amazon's various services for fear of not being pushed to the end of results. However, sellers also love the fact that they do not have to worry about logistics as much and can offload those headaches to Amazon. So much so that Amazon is now able to offer its Logistics to other sites like Shopify as a service.
Although the facts of the lawsuit are true, nothing seems illegal. They are mostly standard business practices. In Walmart and most stores, companies pay to have the best spot in the store, those middle two rows that are right in front of your face. It is not an accident that the most popular brands are on those levels.
The only part of this lawsuit that I believe will have power is the claim that Amazon hides sellers that sell products for cheaper on other sites. If found to be true, it will be pretty damning.
My Takeaway: Although many parts of the lawsuits are true, teh FTC will have a hard time proving them to be true. It will also be hard to prove that Amazon is hurting consumers. Sellers' complaints and feelings alone are not nearly enough to prove anything.
Do I believe Amazon is a monopoly? Last I checked Amazon controlled over 40% of all online sales with their pie continually increasing. So my answer is a strong YES!
Harder question: Is Amazon an illegal monopoly? I am inclined to say no.
Stats of the Week
The amount of time before a government shutdown Saturday night. That was narrowly averted as moderates Republics and Democrats agreed to a deal to fund the government for 45 days. A temporary solution but a necessary step to ensure normal government employees do not suffer.
10%
Oil prices are up 10% in September alone. Which means gas prices are up majorly this month. Mainly driven by Saudi Arabia and Russia agreeing to reduce production to increase prices.
The amount lost by movie studios due to the Writers' and Actors' Strike. Which was enough money to force the hand of movie studios to make a deal and end the strike on Sunday.
I was WRONG!! I assumed the writers and actors did not have any leverage to get their demands met. However, guess in order to make money you have to have a product and without the actors and writers you have no product.
But the problem with the production industry remains. Netflix has obliterated the old way of doing TV, money is being lost on a regular with cable packages and new competition is getting stronger by the day (Amazon, YouTube, Apple, TikTok, Instagram). Studios have to find a new way to generate cash because the gravy train is quickly coming to an end.
The amount shoppers are expected to spend this year on Halloween, according to the National Retail Federation. This is an increase from the $10 Billion spent last year.
1998 was the year that a god was born. Google turned 25 on Wednesday last week.
As someone once said, “Who needs gods when you have Google to answer every question you ever had?” Unfortunately, Google still cannot answer our most important questions. But AI will probably change that, right?
Looking Ahead
JOBS REPORTS
Various economic reports that provide information on the labor market will be released for the month of August and September.
On Tuesday, the Job Openings and Labor Turnover Survey will be released for the month of August. Various parts of the survey provide indebt information on how the economy is moving. According to Investopedia, "The number of vacancies is a widely followed indicator of labor demand, while the quits rate is partly a function of employment demand. Job hires and separations can be used to gauge labor turnover."
Wednesday, ADP releases its National Employment Report for September. ADP is a private payroll provider for most companies in the US, this report is used to track the growth of the labor market in the private sector. It typically is used to get a preview of what the BLS Jobs report might reveal.
Friday is the main event. The Bureau of Labor Statistics' nonfarm payrolls aka BLS monthly jobs report will be released for the month of September. It will provide strong details on what parts of the economy are seeing a growth in labor and what parts of the economy are seeing a decline in labor. It is the most comprehensive report for the labor market.
Sports I Love
This is Getting OLD
What does it even matter? Why do I still care? Why do I continue punishing myself? I would know so much more peace if I just ignored but I CANNOT!! Sigh
Never say Never
Colorado almost came back from a 41-14 deficit to beat USC. They have a long way to go but they seem to be learning.
Taylor Swift Rules Errything
After it was shown that Taylor Swift might be dating Travis Kelce. His jersey sales increased by 400%. He gained over 300,000 new followers. And NFL ratings saw a massive uptick for the Chiefs' games the last two weeks.
NBA Returns
22 days until the NBA is back in our lives. So many different-looking teams. But most importantly, Damian Lillard is now on the BUCKS. I AM PUMPED!!!
Extras
It was Paris Fashion Week last week and my goodness. Is it just me or is fashion now dress as ugly as possible and use hype to make it seem cool to dress terribly? These outfits are terrible! And just look at those shoes. They are literally clown SHOES!! Balenciaga is rolling in his grave seeing all these horrible designs being confused with "fashion".
NEVER buy into trends. It is a waste of energy, time, and money.