Amazon (AMZN) is the ultimate bellwether stock. If it's share price is rising, one can be sure that the price of the popular stock averages is rising as well. So one might wonder about causality. Does the share price of Amazon rise because the price of stocks, in general, are rising, or does the market price of equities follow Amazon's lead?
Something interesting is taking place in the business world these days. People are starting to question the way mega-corporations do business. Facebook sells advertising and sells personal data of those who participate in its social media platform. Amazon gets subsidies from the government and conducts business at a loss. The company is shopping for a location to place its “second” home office, which will employ a vast number of people. They are asking for cities to offer tax breaks as an inducement to locate in their area. Essentially, they are asking the existing people and businesses to pay more, so they can pay less. Profits take a back seat to market share and establishing a foothold in an industry. With a negligible cost of capital, they can pursue this strategy with gusto. On the downside, they are putting traditional retail under pressure and many are going bankrupt.
Google (Alphabet) who sells data and has the more data on people than any other company is the kingpin of advertising and most of us do not know how they monetize that data outside there advertising business. They have avoided the spotlight so far. But the light can easily turn. The recent incident at its YouTube suggests the company may have hidden issues on how people and businesses are removed from their platform.
