Amazon stock gains with grocery delivery despite inflation spike
- AMZN stock gains 2% after announcing grocery delivery expansion.
- Amazon says it will offer free same-day perishable deliveries to 2,300 US cities by year-end.
- July core PPI jumps from 2.6% to 3.7% with tariffs taking a toll.
- Walmart distances itself from reliance on The Trade Desk for digital ads.
Amazon (AMZN) stock is the primary mega-cap performer on Thursday in the wake of a terrible inflation print that has placed US equities in a dim mood. The Jeff Bezos-founded company has introduced same-day grocery delivery in 100 US cities. Amazon already had same-day delivery service in many cities, but the announcement will now expand that offering to perishable items like fresh vegetables and fruit.
Amazon stock advanced 2% on the news, while all three major indices have given up ground. The Dow Jones Industrial Average (DJIA) is leading the downswing by posting a -0.37% performance at 12:00 EST on Thursday.
Core Producer Price Index (PPI) inflation surged from 2.6% in June to 3.7% on an annual basis, worrying investors who have been counting on the Federal Reserve (Fed) to lower interest rates at its September meeting.
Amazon stock news
Amazon said that it was already running a trial by introducing perishables to customers in Phoenix, Orlando and Kansas City, so the company had decided to expand that offering to other major cities. In a statement, the company said it planned to expand that offering to 2,300 US cities by the end of this year.
"By introducing fresh groceries into our Same-Day Delivery service, we’re creating a quick and easy experience for customers. They can order milk alongside electronics; oranges, apples, and potatoes with a mystery novel; and frozen pizza at the same time as tools for their next home improvement project—and check out with one cart and have everything delivered to their doorstep within hours," the statement reads.
Same-day delivery is free on orders over $25 in most cities, and the company said that it would cost $2.99 for same-day deliveries on smaller purchases.
The share prices of Maplebear (CART), the company that owns Instacart, and Kroger (KR) both fell on the news.
In other news, The Information is reporting that Walmart (WMT) is reducing its reliance on The Trade Desk (TTD) after renegotiating its agreement with the digital advertising platform. Sources say the move might benefit Amazon ad sales as Walmart executives have grown frustrated with The Trade Desk's double-digit auction fees.
Amazon stock forecast
Amazon stock gapped up on Thursday, and the move might have been stronger if not for the red-hot PPI print. Bulls continue to focus on the all-time high of $242.52, set on February 4, but AMZN still trades below the July 31 high of $236.53.
Support can be found within the 50-day, 100-day and 200-day Simple Moving Average (SMA) matrix, which stretches from about $206.50 to $220.50. The Relative Strength Index (RSI) is showing recovering buying momentum with a reading just below 60.
AMZN daily stock chart
Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
