Feds Likely to Increase Rate Three Times in 2018
Dallas Fed President Robert S. Kaplan told a business conference in Frankfurt on Thursday that the U.S. Federal Reserve will gradually remove policy accommodation gradually as part of a continuing process. He also said that three rate hike rates this year is very likely. The Fed also increased rates three times in 2017 with the most recent one in December.
While the recent market volatility in itself was not enough to change his base scenario, he remains “highly vigilant” about the turbulence. Further study is needed to determine if it has any effect on the real economy. He doesn’t see this market adjustment spilling over into financial conditions.
Amazon Primed to Dislodge Microsoft at No. 3 Spot
For the past trading days, Amazon.com Inc. (AMZN) has been passing Microsoft’s market cap but has yet to close higher for the first time. If things go well on Thursday, Amazon might become the third largest company in the United States and dislodge Microsoft at the no. 3 spot altogether. Tech giants Apple and Google are in the top two spots.
Tesla Losses Soars to $675 Million
Elon Musk’s celebration of his SpaceX’s successful launch of the Falcon Heavy rocket on Tuesday was short-lived. Tesla (TSLA) reported losses of $675 million in the last quarter of 2017. The figure is $121 million more than the losses during the same period a year earlier. Although Wall Street expected higher losses, it was the largest quarterly loss in the company’s history.
The company is hard-pressed to accelerate and ramp up production of the Model 3 sedan. Tesla has been struggling to overcome a series of bottlenecks that pushed back and delayed production of the more affordable Model 3. The company is hoping to become a mainstream car maker soon.
Amazon Taps Prime Now to Deliver Whole Foods Goods
In order to bolster their delivery offerings, Amazon.com Inc. (AMZN) said on Thursday that it will utilize its fast-shipping Prime Now service in select U.S. to start delivering Whole Foods groceries. There are plans to expand the services across the country this year.
The Whole Foods goods will be added to Amazon’s one-hour and two-hour delivery service in Austin, Cincinnati, Dallas and Virginia Beach. The traditional grocery sellers are looking for ways to profitably deliver fresh food and shelf-stable pantry items. Walmart Inc., Sprouts Farmers Market and Kroger Co. have already shored up their delivery offerings in the United States.
Walmart Shifts Strategy to Boost Online Profits
Walmart Inc. (WMT) met with their suppliers last week and requested that they bring in more merchandise priced at $10 and up. The world’s largest retailer is making a major push to boost profits at its online business. The major vendors that attended the meeting included Clorox Co., Kimberly-Clark Corp., Procter & Gamble Co, and Unilever PLC.
Walmart is shifting its focus on dry grocery products such as sauces, soaps and general merchandise items such as toys and home furnishings. With the change in strategy, they are expecting to realize higher profit margins selling these more expensive items. The built-in cost of delivering goods purchased online is eating up on profits. Walmart is after sustainability and will do away with offering the lowest prices online on every item.