AMZN After Hours: Charging Towards All-Time Highs?

Amazon stock had a solid day of performance in the market, and is now approaching its peak price. Here is what most likely nudged AMZN shares higher on Tuesday.
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Amazon stock  (AMZN) - Get Report had an outstanding day in the markets on Tuesday, June 8. Shares climbed 2%, moving further away from correction territory. Meanwhile, the S&P 500 stayed largely flat, and the Nasdaq moved modestly higher.

In today's edition of the Amazon Maven's "AMZN After Hours", we look more closely at what likely moved Amazon stock's price on Tuesday.

AMZN stock price action on June 8 at the close

AMZN stock price action on June 8 at the close

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Amazon news of the day

  • The turf war in the prescription medication space continues. Amazon announced a new program for its Prime members, following in the footsteps of key peer Walmart  (WMT) - Get Report. In the company's quest for world domination, advances into "green and brown field" opportunities, like healthcare, tend to be perceived by the market and Amazon investors as a bullish factor.
  • Prime Day shopping season has already started in some product categories – two weeks early, to be precise. Anticipating Amazon's most important sales event may have played a role in pushing AMZN stock price higher. 
  • Not all was positive news this Tuesday. It is estimated that the morning's internet outage cost Amazon $34 million in revenues. But perspective here is needed: the figure represents less than 0.01% of Amazon's 2020 total company sales.

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Yields: important tailwind

Perhaps the most important development of the day, however, was macroeconomic: the sizable move lower in interest rates. The 10-year treasury yield dipped below 1.53%, down 4 basis points, peeling further away from the 18-month high of 1.73%.

Generally, lower interest rates mean a lower discount rate on which to value stocks. Growth names like Amazon benefit the most, since the company's earnings and cash flow opportunities "live" further in the future, and are discounted to present value at a lower rate.

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Key metrics on Amazon stock

Below is a summary of a few of Amazon's key stock-related numbers:

  • AMZN is now up for the year, although minimally.
  • AMZN is down less than 8% from the September 2020 peak. Could shares be heading to all-time highs, after more than 9 months under water?
  • Amazon's equity is valued at around $1.65 trillion.