The octopus-like arms of US online retail giant Amazon are getting into the hearts and wallets of Aussies, with sales now reaching $2.63 billion a year. And to show how the brainwave of the world’s ‘sometimes’ wealthiest man in the world, Jeff Bezos, is becoming more acceptable here, the jump in sales was 47.7% in a year!

That said, the outfit locally isn’t making profit with a small tax bill of only $31.2 million, the company had a net loss after tax in Oz of $32.7 million.

But this is nothing new for Amazon — it’s so big it makes losses as it grows its business, making life hard for its smaller competitors.

To understand what $2.63 billion worth of sales is equivalent to, Harvey Norman’s 2022 revenue was $2.85 billion, so Amazon is becoming a bigger threat to bricks and mortar businesses, which also do online.

Why is this happening? Try these developments:

1. The pandemic taught many shoppers about what can be bought online.
2. Online sellers discount prices.
3. Amazon is experienced at growing its market footprint and uses losses to build a bigger customer base.
4. It has 200 million products available!
5. It has grown its subscription service (Amazon Prime) from $63.6 million to $102.7 million.
6. More people work from home and can be easily distracted and marketed to as more and more time is spent online.

This is just another post-pandemic implication for the economy and it will only grow, as those working from home have more time to peruse online offerings and those going to work are more time poor and like the idea of ordering something in the morning and coming home to find it waiting for them on the doorstep!

To stocks this week and data will determine what happens to share prices.

The US is the main game for stocks and the Aussie dollar, so I’ll be watching US durable goods to see if production, home prices, consumer confidence, construction and the ISM manufacturing index is slowing. While home prices and consumer confidence will have a bearing on what the market thinks about inflation, the other numbers will give a view of how fast the US economy is slowing and that in turn has an inflation implication.

Here in Australia, it’s a big week ahead, with retail trade for January and the December quarter economic growth reading on Wednesday. On the same day we get the monthly CPI, which while not as respected as the quarterly inflation statistic, the trend will be looked at closely by the market.

On Thursday we see home prices and building approvals, which the RBA will want to see that previous rate rises are working to slow down buyer enthusiasm to pay high prices for bricks and mortar.

The market will also be keen to see the Chinese data out later in the week.  “In China, all eyes will be on the official government and Caixin high-frequency purchasing managers’ indexes for February,” CommSec’s Craig James observed. “Economists and investors will be looking for a ‘re-opening’ bounce in services activity around the Lunar New Year period. That said, extended post-Covid holidays could subdue activity in the manufacturing sector.”

I’ve said it and so have central bank bosses — we’re all watching the data drops and until inflation is beaten, stock markets will be more negative than positive. However, when inflation is down for the count, stocks will surge and the Oz dollar will spike but you have to hope that we don’t have to endure a bad recession before the good times roll.