Carnegie Market Blog


Retail Is Struggling Financially - Current Inflation Numbers are Out

Posted by Brent Luce on May 12, 2017 3:02:33 PM

Retail Death Spiral

If you have not noticed, brick-and-mortar retailers have not been doing so well.  Value investors who have been trying to “bottom-fish” in the space have continued to suffer.  As we know, Amazon and other companies using and benefiting from new technologies have been perhaps the most disruptive force ever to affect consumer buying behavior.  As I have mentioned before, we seem to be arriving at the breaking point where the weak can no longer fight the battle.  This is just one example of how new technologies are changing the way we live and affecting every business and sector.  When looking at investments, I think there are two types of companies – those poised to benefit from these disruptive forces and those who are likely to suffer from it.  The table below, which I am borrowing from MKM, shows the number of store closings announced just this year – this is just major stores, and does not include the hordes of smaller retail stores that have closed.  Amazon has been taking over fifty cents of every new dollar moving into retail e-commerce, so we can guess that 50% of these sales are going right into Amazon’s pocket.    At the bottom you will see the stock price charts of traditional retailers versus Amazon; it is self-explanatory.  Deep Dive:  The New Retail Ecosystem

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Topics: Inflation, $AMZN, Big Data,, Technology, Retail Distribution

Higher Rates and the City of Champions

Posted by Brent Luce on Nov 2, 2016 4:31:34 PM

Mobile Internet Usage

For the first time ever, mobile internet usage has surpassed desktop internet usage.  In my house, I think this happened about four years ago.  The most interesting part of this chart to me is how fast things have changed.  Just five years ago, almost all internet usage came from desktops.  This rapid change means (among many other things) that every business should have a mobile-friendly website.  In the U.S. at least, I bet that most work-related internet use still comes from desktops/laptops and that most personal use comes from mobile.  MORE:  Mobile vs. Desktop in the World of Millennials  

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Topics: Cleveland, Inflation, TV viewership, mobile Internet Usage

The Great Rate Debate

Posted by Brent Luce on Apr 21, 2016 3:14:25 PM

The Great Debate

There has been much debate on whether rates are going to rise or stay at historical lows and every time the Federal Reserve does something (or nothing), many of those paying attention seem to disagree.  MORE:  Yellen will regret slow pace of rate hikes.  Below is chart of 10-year Treasury rates over the past year. For the most part, rates have been downward trending, culminating (so far) in the synchronized bottom on February 11.  

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Topics: Oil Prices, Inflation, Jobless Claims, Interest Rates

Inflation and the Biggest Product Launch Ever

Posted by Brent Luce on Apr 7, 2016 3:49:21 PM

Biggest Product Launch Ever

Last week, Tesla started taking “reservations” for the new Tesla Model 3.  The Model 3 is the new Tesla for the masses – the electric car that Tesla CEO Elon Musk believes will revolutionize the auto industry.  It turns out that in the first week, as evidenced by the lines at Tesla dealers you may have seen in the media, Tesla received reservations for 325,000 model 3s.  This number shattered expectations and represents $14 billion in sales, making it the biggest product launch in history, at least according to Elon Musk.  Put another way, the rest of the industry sold 90,000 units in the U.S. in 2015.   Maybe they need to start applying surge pricing on Teslas to balance supply and demand…haha.  What is unknown at this point is how many of these reservations will convert to sales and how much difficulty Tesla will have in delivering all of these vehicles.  MORE:  Everything you want to know about the Tesla Model 3 

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Topics: Market Dispersion, Tesla, Inflation, S&P Operating Margins

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