Amazon Joins Apple with Positive Outlook to Support Cryptos

Key Insights:

• On Thursday, Amazon.com (AMZN) released its fiscal second-quarter earnings.
• Revenue was up $121.23 billion versus a $119.09 billion estimate while recording a net loss of $2.0 billion for the quarter (EPS loss of 0.20 cents).
• Amazon.com also delivered a positive outlook, leading to a 13.62% jump in the AMZN share price during extended trading hours.

It has been a bullish July, with market sentiment towards Fed monetary policy and US corporate earnings contributing to the upside.

Recovering from July 13 lows, the crypto market looks to end a three-month losing streak.

On fears of the Fed taking an aggressive interest rate path to bring inflation to target, the crypto market cap fell to a July 13 low of $824 billion. Fears of a US economic recession added to the market angst.

However, a shift in sentiment led the total crypto market cap to a July high of $1,094 billion, with US corporate earnings, US economic data, and market sentiment toward Fed monetary policy delivering support.

The crypto market correlation with the NASDAQ 100 remains firmly in place despite US economic woes and positive crypto network updates.

On Tuesday, Walmart (WMT) spooked the markets with a negative outlook for Q2 and the full year. Walmart shares slid by 7.60% before steadying during extended trading hours. The gloomy outlook left the NASDAQ 100 down 1.87%, weighing on stocks linked to consumers, including Amazon.com (AMZN).

The NASDAQ 100 pullback, in response to the WMT outlook, weighed on the broader crypto market before a late rebound supported by a positive outlook from Microsoft (MSFT).

A similar market reaction is likely with other US corporate earnings results that investors consider a litmus test of the US economy. These include Amazon.com and Apple Inc., among others.

Amazon.com Beats Revenue Estimate and Delivers Positive Outlooks

On Thursday, Amazon.com released its fiscal Q2 ended June 2022 earnings results during extended market trading.

Key numbers included,

• Net sales increased 7% to $121.2 billion in Q2 2022 compared with $113.1 billion in Q2 2021. Analysts expected net sales of $119.09 billion.
• Operating income declined to 3.3 billion in Q2, compared with $7.7 billion in Q2 2021.
• Net loss of $2.0 billion compared with net income of $7.8 billion. ($3.9 billion pre-tax valuation loss in Rivian Automotive Inc. investment).
• Free cash flow decreased to an outflow of $23.5 billion for the trailing 12 months, compared with an inflow of $12.1 billion for the trailing 12 months ended June 30, 2021.

While beating revenue estimates, headwinds included,

• Unfavorable foreign exchange ($3.6 billion negative impact year-over-year).
• Fuel, Energy, and transportation costs

Amazon CEO Andy Jassy said,

“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network.”

Jassy went on to say,

“We’re also seeing revenue accelerate as we continue to make Prime even better for members, both investing in faster shipping speeds, and adding unique benefits such as free delivery from Grubhub for a year, exclusive access to NFL Thursday Night Football games starting September 15, and releasing the highly anticipated series The Lord of the Rings: The Rings of Power on September 2.”

Amazon expects net sales of between $125.0 billion and $130.0 billion for the third quarter. The forecasts represent growth of between 13% and 17% compared with the third quarter of 2021.

Amazon.com’s (AMZN) share price increased by 1.08% during regular trading hours. In response to the earnings results and outlook, shares surged by 13.62% to $16.66 during extended trading.

Crypto Market Responds to CEO Jassy’s Upbeat Outlook

After tracking the NASDAQ 100 through the US session, Amazon.com earnings results delivered the crypto market with a boost during extended trading hours.

The total crypto market cap struck a day high of $1,092 billion, coinciding with Amazon.com and Apple Inc.’s earnings results.

Amazon.com reported its quarterly earnings at 1730 Eastern.

The upside for Amazon.com, the NASDAQ 100, and the crypto market came despite disappointing economic data from the US.

The US economy contracted by 0.9% in Q2 versus a forecasted 0.5% expansion. The economy contracted by 1.6% in the previous quarter.

On Thursday, bitcoin (BTC) rose by 3.90% to $23,856.