By
Godfrey Benjamin
April 23rd, 2024
Thousands of Amazon.com Inc. sellers who built their businesses using China’s cheap and efficient manufacturers are on the spot as the coronavirus shuts factories there. AMZN stock was down on Tuesday but seems to start growing in the pre-market.
Amazon.com Inc (NASDAQ: AMZN) is allegedly doing everything it can to stock up on inventory as the coronavirus (COVID-19) spreads at a rapid pace. Worries about it becoming a pandemic rise and people are buying everything from the stores (like this would help).
Those fears have sent the most of the markets falling. Only today, the Dow was down 248 points at 4:15 am ET, while the S&P 500 lost 0.77%. At the same time, the Nasdaq 100 slumped 0.92%.
That took Amazon (AMZN) stock down along with it and since today, the e-commerce giant lost more than 8%. Of course, $1 trillion of worth now seems like a far history. Let’s just mention that on Monday, February 24, Amazon CEO Jeff Bezos, LVMH CEO Bernard Arnault, together with the other 500 Forbes richest people, lost a combined $139 billion just because of coronavirus. Just remember that data when you think you’re having a bad day.
Amazon Stocking Up amid Coronavirus Fears
Be it as it may, there are some good reasons why Amazon (AMZN) investors may be afraid. The company has a lot of products from China. Plants there have been shut down, there is no production at all, and let’s just mention that most of the airways with China are closed as well. Ships are also a big no-no.
In order to respond in a perfect manner, Amazon decided to place bigger orders on a more frequent basis for Chinese goods being shipped to the U.S.
The company is reportedly ordering six to eight weeks’ worth of inventory on certain Chinese-made products, much longer than the average two to three weeks’ worth of inventory it typically keeps on hand.
In addition to that, some of the sellers on Amazon Marketplace have been restricting advertising, in order that they don’t come to a situation where they don’t have enough supply to meet demand.
What Will Happen at the Prime Day?
This could even impact the famous Prime Day, a one-day event in July when Amazon Prime customers get crazy discounts on a bunch of items. According to reports, Amazon contacted producers via email, expressing its concerns about Prime Day and researching how coronavirus could impact supply.
However, even though Amazon is pretty much acting bullish when it comes to preventing business interruptions amid the COVID-19 outbreak, that might not be enough.
Earlier, China published the official numbers of those affected by the virus, revealing that 78,064 people have contracted the virus in total, with the death toll standing at 2,715. South Korea has also seen a spike in coronavirus cases, becoming the country with the second-largest number of people with the disease.
The UK has meanwhile announced measures to combat the outbreak after a number of European countries reported their first cases.
Italy has been hit hard with the coronavirus, as the latest reports showed some 270 people confirmed infected, while 7 patients died. Croatia, Austria and Greece also said they have more than 1 infected.
Amazon Opening Its First Cashierless Grocery Store
That is one of the reasons that this week, Amazon opened its first grocery store to pilot the use of the retailer’s cashierless “Just Walk Out” technology that has previously powered 25 Amazon Go convenience stores in a handful of major U.S. metros. It basically allows customers to shop for everyday grocery items like fresh produce, meat, seafood, bakery items, household essentials, dairy, easy-to-make dinner options, beer, wine and spirits, and more.
Be it as it may, Amazon (AMZN) stock failed this month’s breakout above 18-month resistance. Even so, it could make a final stand at rising trendline support near $1,850, which has narrowly aligned with the 200-day EMA.
United States pre-market trade started their slowly rise on Wednesday, with the coronavirus fears slowly subsiding across the country. American tech giants Google and Microsoft reportedly started shifting production from China to countries in Southeast Asia due to the COVID-19 still hampering the industry in the epicenter of the outbreak.
The Dow Jones was up 0.17% at 6:32 am ET, while the Nasdaq 100 increased 0.36% at the same time. A minute later, The S&P 500 gained 0.28%.
At the time of writing, Amazon (AMZN) stock was rising in pre-market by 0.46% to $1,981.90.