Sandy and Amazon
Which industries benefited from Hurricane Sandy? Very few, one has to suppose. But among those must be e-commerce, which means another victory for Amazon.com Inc. (NASDAQ: AMZN), even if it was not entirely earned. With almost every major store, and all the minor ones, closed across much of the Mid-Atlantic, New York and New England, early shoppers were forced to turn online. Just as some people have voted early in the national election, past retail activity demonstrates that some consumers do not wait until mid-November or later to buy gifts. These people are either very organized or worried that some popular items will be sold out later in the year. Amazon shares suffered when it reported worse-than-expected earnings last quarter. And some analysts worry that the current quarter will be soft. The stock is off to $238 from a 52-week high of $264. Amazon’s e-commerce advantage almost certainly shined during the storm and will for the days or weeks of clean-up to come. And its results for the holiday quarter will get a boost.
Europe’s financial problems were pushed off the front pages for a few days as Hurricane Sandy roared up the East Coast. But they did not go away, and they may have worsened. The debate over whether the Greek economy can recover during this decade has become more fractious. Many European finance ministers are convinced that the depression of the nation’s gross domestic product will make any progress impossible. That means the current sum of aid money will be well short of what is necessary. The problem arises once again whether Greece should have more time to get its house in order, which could involve another write-down in its bonds. The matter of Greece needing much more aid may be put off until later — kicked down the road. According to Bloomberg:
European officials are grappling over ways to fill Greece’s financing gap two weeks before a decision is due on whether to give the country a further round of emergency funds. While German Chancellor Angela Merkel has signaled her desire to stand behind Greece’s euro membership, Samaras’s coalition is still at odds over the steps needed to secure more money.
Sandy and the Internet
Some popular websites knocked offline by hurricane damage to the facilities they use to host their content have still not recovered. The popular gossip site Gawker is among them. Other sites hurt by the storm, which include the Huffington Post and MarketWatch, are back to normal now. The online content industry did a poor job of explaining why their sites went down, perhaps because each made a critical mistake. They did not appear to have a backup plan so that they had several sets of hosting locations around the country. They relied too much on the ones in the New York City region. It is too early to know how many visitors and how much advertising revenue this will cost. But it must have been more than a little.
Douglas A. McIntyre