It’s no secret that Jeff Bezos of Amazon (NASDAQ:AMZN) and President Donald Trump of the White House are not exactly friends. Most likely, they hate each other. Routinely, Trump has blasted the Bezos-owned Washington Post as fake news. In turn, Amazon has accused Trump of awarding a key military contract to Microsoft (NASDAQ:MSFT) due to the personal rift. In reality, the Trump administration has been great for AMZN stock.
Just look at the gifts that have been bestowed upon the wealthy this year. Sure, the President downplayed the novel coronavirus, resulting in much criticism when that fact was revealed. Nevertheless, by extending this crisis, who was the big winner? Jeff Bezos and AMZN stock. If I’m not mistaken, they’re the biggest winners in what is otherwise an awful time for Americans.
Personally, this dynamic is one of the reasons why I wouldn’t be heartbroken in the least if President Trump wins a second term. But frankly, with recent developments, I don’t see this happening. I believe Americans are finally tired of the general aura of antagonism and deflections of responsibility.
But if lightning strikes twice, that will be brilliant for headlines. And shocking headlines are perfect for my line of work.
Additionally, another Trump term may mean more chaos, which then may breed more coronavirus cases as we saw last summer. And that, my friends, would be the catalyst for AMZN stock to enjoy its next leg up.
Interestingly, Bernstein recently upgraded Amazon to “outperform.” In its research note, it observed that “Some raised eyebrows on calling AMZN an eCommerce share gainer in 2021 as retailers prioritize store re-openings alongside pent-up consumer demand to try those jeans on.”
Obviously, brick-and-mortar retailers will do everything they can to attract customers. After all, the holiday season represents the make-or-break quarter. However, if you’re long AMZN stock, I wouldn’t worry about this potential threat.
Lingering Coronavirus Fears Will Help AMZN Stock
Yes, physical retail demand is strong. Anecdotally, I recently visited a Costco (NASDAQ:COST) store in Los Angeles and the place was packed. No, the 405 freeway was a breeze. But apparently, everybody wanted their 800 pounds worth of mayonnaise. Go figure.
Not anecdotal, though, is Target (NYSE:TGT) and its willingness to take Amazon head on. Despite Target’s Deal Days coinciding with Amazon’s rescheduled Prime Day sales event, Target isn’t blinking. Either Target is crazy, or its internal consumer data analysis demonstrates that it has a chance to attack the e-commerce giant effectively. And it’s hard to argue with the latter.
While physical retail trends are encouraging, the one factor I have trouble accepting is bullishness in the apparel segment. Though some consumers are anxious to try out the latest fashions, you must remember that most Americans are fearful of contracting Covid-19.
Again, this isn’t an anecdotal statement but evidence gathered from a YouGov survey. On Oct. 6, 60% of Americans reported fear of coming down with the coronavirus. And that fear has increased significantly from Sep. 18, when 46% reported such concerns.
Of course, this is important to note because of President Trump’s own illness. Optically, this is about the worst thing that could happen as POTUS is the world’s most protected individual. Thus, the fact that the coronavirus could still find its way in suggests that no one is safe. And it also means that no precaution is too extreme.
Plus, ABC News reported that “34 people connected to White House, more than previously known,” have been infected by the coronavirus. In other words, this thing spreads very quickly.
Now, imagine the kind of stuff that goes on in dressing rooms. Really, who knows if people haven’t accidentally left spittle on articles of clothing or what have you?
Are you going to be in a hurry to try those new jeans or that sexy new shirt? I didn’t think so.
Contactless Is Still in Vogue
This brings me back to AMZN stock. While Americans have generally gotten over their fear of grocery shopping in person and some are even traveling by air, I think the limit comes down to the apparel market. I’m not touching anything, and I believe most people feel the same way I do.
That’s not to say that I haven’t bought clothing during this crisis. On the contrary, I’ve done my apparel shopping online. Given that fear is still a strong emotion among American consumers, AMZN stock still has a leg up on the competition.
Moreover, what if coronavirus cases worsen? From data provided by the Centers for Disease Control and Prevention, cases have been conspicuously rising since Sept. 8. Yeah, I suppose that the CDC is a shadow government organization that’s intentionally misreporting coronavirus tests with coronavirus cases. Frankly, epidemiologists from the CDC cannot be trusted — but you can trust experts on YouTube.
While I’m being somewhat facetious, I personally know people who think like this. It’s frightening. But Trump’s illness is a paradigm shift for the woefully ignorant. The coronavirus is real, and it should be treated seriously. And while awfully cynical, this is great news for AMZN stock.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.