Target, Walmart or Amazon?

Watching one of my favorite shows this afternoon on CNBC, they played a game, Would you Rather with Target, Walmart or Amazon. I found their discussion interesting as many of them picked Amazon, or Target over Walmart. Since they didn't ask me, I thought I would write my 2 cents.

I feel there is one winner as the other 2 are trying to catch up. The analyst on the show stated that Amazon will try to squeeze profits from Walmart and Target. I don't think they account for the high over head cost Amazon has between delivery, warehouses and employees to run those locations. Amazon clearly doesn't have the overhead of running a retail location, but that is nominal when you consider a couple other factors that retail locations allow.

Retail locations allow people to feel, touch and try. You can't get that experience online. Retail locations also have the ability to take cash and food stamps that you can not do on Amazon's website. When people use other forms of payments including food stamps, many times they buy other things in addition to food. This ultimately leads to the realization that Amazon does not cater to low income families with make up a large percentage of households in the United States.

Amazon might be a better play if you consider their business web services and video services. However, Amazon has increased the price of their Prime membership to increase profits while shrinking delivery times by a day. While Amazon collects a monthly fee for their services, Walmart provides the same delivery service with no membership.

Each company has spent money in the past couple of years to improve. Amazon bought Whole Foods for a retail food presence that also expands their Prime Membership reach for great synergy as Whole Foods caters to a more affluent customer. Target spent money to improve their stores in the past year, but I didn't really see a difference. Walmart on the other hand spent money to acquire Flipkart which is the leading online retailer in India, the 2nd largest country by population in the world. So each company has spent money to expand their businesses rather than wasting on share buybacks.

From the investments the companies made, I believe Walmart's purchase of Flipcart was the most aggressive that will benefit them the most in the long run. Walmart already has a great online presence so adding Flipkart jumped them in front of Amazon in India. Flipkart's synergy is great as Walmart's website is a marketplace where a variety of sellers also sell products like Amazon.

In addition, Walmart also has it's own brand of products they sell for a higher profit margin to comparable name brands on the shelf. And Walmart even sells low cost value based items in that are similar to what you could get at a Family Dollar, Dollar Tree or Five Below. I do realize that Target does similar things to Walmart, but ultimately Target appears to be a different version of K-Mart which eventually disappeared.

To avoid the fate of K-Mart, Target needs to improve their online presence to the point someone wants to use their app to search for things first like Amazon and Walmart. Target must create a marketplace for other sellers so their may profit from seller fees. Target must also improve their value based presence. To me, there are too many things that Walmart already does well that Target isn't in the same league as Amazon and Walmart

All factors considered, I believe Walmart is the best bargain for your investment dollars of the 3 with Amazon in a close 2nd due to their server business. Amazon could get in front of Walmart if they were to take advantage of a major retailer going out of business like Sears or JC Penny's who have locations and their own brands.

Market Down Again

• The Dow Jones was down again today for the 8th straight day. The Nasdaq gave back most of yesterday's gains. Retail stocks looked up lead by nice gains in Best Buy and Home Depot. Walmart was even up decent today. The move was based on a new rule that will require Amazon to collect sales tax from sellers. Amazon led the FANG stocks down including.
• FANG stocks of Amazon, Netflix an Google were down big today. Amazon and Google closed near their lows, but Netflix made up most of what it lost in the morning. Facebook is still running strong due to the new video sharing options on Instagram.
• Mad Money's Jim Crammer says Intel is way under valued even with the CEO scandal. With the positive earnings from Micron (MU), I would have expected Intel to power higher also. It will over the next week and I would expect a new high by Intel's next earnings report.

Tech and Media Up, Retail and Banks Down

• With the rise in the Fed Funds Rate you would expect the banks to be up. Interest rates actually dropped this morning and took the banks with them. JP Morgan actually dropped below 108 and bounced up some from there. 
• Boeing spiked up this morning shortly after the market opened to 367 and then fell sharply to 359 where it bounced up. I would expect a bigger bounce for the day on Friday, but don't believe I will be trading it.
• FANG participated to the upside today with Amazon, Netflix and Nvidia hitting new highs today. Alphabet opened up, dipped to where it opened and drove higher until 1:30pm when it gave back 10 points to go up another 5.  I traded the movement from 9:40am to 10:20am for a nice gain. 
• I heard this morning that Amazon Prime membership might have peaked and is feeling pressure from Walmart. Amazon is so much more that just shopping and apparently the market didn't believe that as Amazon hit a new high and Walmart faltered with the rest of retail.
• A retail name that did not falter much was Best Buy. Best Buy trades like a tech on some days and like a retail on others, but more like a tech. 
• Macy's, L Brands, Home Depot, Walmart and almost everything else retail related was down today after there was a very positive number regarding retail price index this morning at 8:30am. Verizon hit a nice bottom around 47.30 where it went up from there. Home Depot hit a bottom around the same time at 198.25. I would expect Home Depot to have it's regular Friday morning run tomorrow and hit 202 by the end of the day.
• Towards the end of the day there was news that the Department of Justice will not challenge the court ruling allowing AT&T to acquire Time Warner. Disney, Comcast and Netflix were up nicely. According to a chart maker, they see Netflix will hit 415 soon.

Exciting Start to the Week in the Market

• Apple is holding its annual developers conference starting today and this time the stock didn't drop. It actually hit a new high again. Amazon hit a new all time high as it was up the whole day. Alphabet was up for most of the day also. Facebook didn't lose too much after the new report on the sharing of user data.
• Microsoft hit a new high with news of their purchase of Github.
• Nvidia hit an all time high also today. Netflix was up, but Micron was not. 
• Almost all retail stocks were up today including Macy's hitting a 52 week high, Home Depot gained 4 points, Walmart and Best Buy were up too. 
• Boeing was up with positive news before market open which appears to be a reoccurring theme, but it struggles to hold on to its gains.
• Verizon, the bank stocks and oil stocks were down today. 
• Tuesday is setting up to be a day of retraction and I am sure Trump will have something to say for Wednesday to create a drop. The market is going up as the Nasdaq hit a new all time high today, but there appears  to be a reason every week for a drop.

Tuesday Selloff... Again!!!

• Everything opened down and went further. Oil dropped sharply due to more barrels being released across the world. Interest rates dropped sharply due to overseas risk specifically in Italy and therefore bank stocks dropped sharply. 
• Netflix hit an all time high today despite still dropping some during the day. 
• Home Depot dropped below 185 and I would see this as being a great buy for Call Options on Wednesday morning. Walmart also appears to be bouncing off 81.
• Other than that, it was a little boring day. The trend appears to be sell off from Monday highs and continue through Tuesday. Since Monday was Memorial Day, we had more selling to do to catch up with the world on Tuesday. Wednesday should be a great turn around day as we are the United State of America, not Italy!

Friday Market News

• Since 2pm on Wednesday, Boeing (BA) and Tesla (TSLA) have moved in almost exact opposites according to their charts. Thursday and Friday, Tesla was down and Boeing was up. Tesla appears to hit a level of resistance to the downside Friday at 275 and Boeing is at a level that I have seen it stumble on this year. I wouldn't be surprised if both continued in their direction on Monday and reverse course on Tuesday.
• Alphabet (GOOGL) dropped prior to the market opening on Friday due to old news that Google may face monopolizing claims based on their shopping results. Sounds like garbage to me and according to the charts, it was due to come down. I would expect it to start down on Monday, hit a level of resistance around 1060 and take off to the upside for the remainder of the week. 
• The banks came down further on Friday, Walmart was nearly unchanged, but Home Depot had its regular Friday run. Trump tried to blast Amazon again with a Tweet to say that he recommends the post office to double shipping rates for Amazon. I wish they would double the rates on businesses mailing crap post cards and Discover with their crap credit card offers of 3 to 4 a week.
• What should we expect for next week? Higher interest rates? Higher oil? More tarrif talks? Korea issues? There are enough issues in the world that you can pick a number of reasons why the market might react in a negative way. Ultimately, the market is based on earnings and cream will rise to the top.

Thursday Market Movers

• Walmart beat their earnings estimates and the stock price rose before the market opened and went straight down just under 84, up past 85, Below 84 to finish 84.50 approximtely. Home Depot didn't fair much better. Best Buy shares were up close to their all time high which was set yesterday and finished below 89/share.
• Boeing was a leader throughout the day. Everything dropped for a bottom at 2pm today. Alphabet (GOOGL) opened down, came up to 1090, down to a bottom at 2pm of 1075 and finished the day down around 3 dollars.
• Boeing might have been one of the few that came close to the morning high in the afternoon. If you were buying calls, hopefully you sold them by 11am because Puts were the only way to go for the rest of the day. I would expect similar market movement on Friday as it appears to be a theme for this past week.
• Macy's appears to be one of the few that the market loves as many other companies have beaten their earning estimates but still would go down once the market opens as there is something the market decides was not perfect.

Wednesday Market Stuff

• Interest rates were a big driver in the market for the past couple of days. The market was mixed today with the higher interest rates as a head wind to a small upside. Macy's (M) held it's gain throughout the day ending the day up 10%. I believe this is a strong stock in an dividend structured portfolio, but don't see much volatility for some time. I could see it hitting $40/share by November.
• Home Depot was down today to the lower levels that it was at yesterday after earnings report. Walmart was up yesterday and again today as they report earnings tomorrow morning before the market open. I could see it dip, but come up big on the conference call.
• Apple made up some of the loss from the last 2 days. Google tried to make it up but gave it all back in the last hour. Nvidia opened down, raced up and went back down to finish the day flat like Google.
• Cisco reported earnings after the market close today and the reaction was not good. I would expect a similar reaction as Home Depot had yesterday. It will start down, bounce up and slowly give some back towards the end of the day.
• Some interesting action happened around 1:45pm today. Boeing (BA) went straight down from 343 to 340.40. That is not a huge movement but when looking at the chart, it was sharp. As was Tesla's movement to the upside at the same time from 283 to 287. I didn't see or hear any news that would have created that kind of reaction, but based on their movement, I would look for them to continue in the same direction Thursday morning before reversing around 10 or 11am.

Monday Ups and Downs

• The market opened Monday up and peaked around 10am. It went down, back up, then down... it finished the day on the upside although at its lowest levels of the day. It sets up for a great week at Home Depot reports earning Tuesday morning before the market open and HD has a history of beating expectations for over 13 quarters so we expect the same tomorrow. 
• Home Depot pulled Walmart along with them to the upside as they report earnings on Thursday before the market opens. I would look to buy Walmart options Tuesday morning if the market has a positive reaction to HD earnings. If the reaction is negative, I would wait until the afternoon to buy those options and I would look for 2 weeks out at the money.
• Tech stocks including the FANG stocks were mixed today. Microsoft appeared to be a winner today. 
• Another boring rainy day watching the stock market in Orlando today. Hopefully tomorrow will be more exciting.

Thursday Market Craze

• Another day another way to clear President Trump from allegations. Many things have begun to spur the market higher. 
• Google had it's annual I/O developers conference at the beginning of the week where they announce new technology they will be producing. After such event, I have noticed that Alphabet (GOOGL) makes a strong run as it did yesterday. I thought it was a great time to buy a call when it was 1068. If you had, you could have quadrupled your money.
• Wednesday appears to be a turn around day like Tuesday. Boeing was up early, down to 338 and after sputtering there for about an hour it took off. 
• Unfortunately I sold out of my positions around 1pm. If I held another hour I would have more than doubled my profits. There was no turn back before 3pm on Wednesday.
• Roku was beaten down just under 31 a share since there last earnings report where they gave poor guidance. They started running up on Monday and on Wednesday was up 4 by close. They moved up another dollar after reporting their earnings Wednesday afternoon. I expect Roku to hit 50 a share in the next month.
• Sunrun (RUN) is my solar provider and they have moved up part of the energy run over the past few months. They continued higher after their earnings report Wednesday afternoon.
• The biggest news that the market didn't like was Walmart (WMT) buying a 75% in Flipkart which is larger than Amazon in India which is the 2nd largest population in the world to China. This is the biggest and best news from all of the earnings reports. CNBC's Jim Crammer loves Apple and Apple is spending $100 billion dollars on Share buy backs which does not equal dollars to shareholders. The tax reform should be made to make companies better through acquisitions and mergers rather than share buy backs. I expect Walmart to double in value by December.

Tuesday Market News

• ValueAct is an activist investor that has taken a $1.2 billion stake in Citigroup. It was announced yesterday afternoon and drove the price of Citigroup up along with the whole financial sector while most stocks were down today in anticipation for Trump's announcement on Iran sanctions.
• Turn around Tuesday was interesting. Alphabet (GOOGL) hit 1065 before falling down to 1051. It touched it again at 11am and was up from there. The middle of the day high was just over 1060, came down to 1057 and spiked up along with the rest of the market about 5 minutes into Trump speaking. I bought a 1055 Put for 6 and sold it for 7. Google continued lower to 1055 and I could have sold that Put for just under 9 before coming back up to 1060.
• Boeing bottomed at noon just under 337, so I bought call options. I had 10 with the average cost of 2.05 per contract. I place a limit sell order for 3, but changed it to 2.5 as we got closer to 2pm. I missed out on at least $500 as Boeing spiked up to 341 during the speech before coming down quickly to 337. There was news about Boeing having a contract to sell plans with an Iranian company and so it is unclear how the market will react to Boeing for the rest of the week. I would expect it to start down tomorrow to 335, move up to 342 and possibly higher. 
• Home Depot had a nice run up this morning before changing direction to the downside around 11am. HD still finished up for the day. Walmart was a boring stock all day until it moved up at the end of the day.
• As will other Trump speeches, everything spikes in the market a couple of minutes into the speech and comes down quickly after the speech. Great for option day traders. Plan accordingly.
• Disney reported better than expected earnings after the market close today. There is very little movement after hours. Disney doesn't move much as it is so option sellers would love this. Everything might be different tomorrow, but I wouldn't count on it. 

The Monday After....

• Apple continued to move higher today on the heels of the Berkshire Hathaway shareholder meeting with Warren Buffet over the weekend. 
• Alphabet (GOOGL) quickly shot up almost 15 points shortly after the market open. I benefited from buying one 1060 strike price call on the way up for 7.6 and selling it less than 10 minutes later for 11. It came back down to 1058 and going back to 1064 (another sell opportunity if didn't sell earlier), back to touch 1058 and floated between 1059 and 1062 all afternoon until 2:30pm when it made it to 1064 (sold for the 2nd time today, 1070 strike price) and then down past 1058. Based on the limited price movement today, I would expect Google to open on Tuesday lower, move higher before falling more than 20 points throughout the rest of the day.
• Walmart and Home Depot fell today, made mini runs up before falling more. I have observed this trading pattern for the past couple of weeks. It may hit 185, but may trade below 182 first this week. Friday's have looked really good to take advantage of buying after being down all week. Both report earnings next week. They both should knock it out of the park when they report. They might be the last step to bring the market higher.
• Boeing held strong most of the day and when everything else fell, it came down 2 points, but it trades over 340 when that happened. Based on the trading patterns, I would expect it to hit 335, come back to 342 and fall to 330 like it has done over the past couple of weeks.
• More earnings this week means possibility of having more upside, but given the major market components have reported already, I don't know that we will see that much upward movement before coming down to an area similar to last week.