Today's Market: Amazon Takes Aim At Discounters And Two Spin-Off Stories

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Includes: AMZN, CPN, EBAY, ETSY, HPQ, NRG, PPL, TGT, TLN, WMT
by: Matthew Smith

Summary

PPL completed the spin-off of TLN, which began trading yesterday.

The US Dollar is up over 21% against the Japanese Yen over the last 12 months.

AMZN is offering free shipping to everyone for products weighing 8 ounces or less.

For such a small country it is truly amazing how much attention Greece is able to garner in the media with its back and forth of what it may or may not due relating to its upcoming debt payment. At this point it certainly appears that a contagion created by Greece is off the table, which is good news for Europe, and this would ordinarily make Greece irrelevant. Unfortunately that is not the case and the media continues to pay far too much attention to the story which could lead to an overreaction if Greece decides to act up.

Chart of the Day:

Just how strong has the US dollar been over the last year? Well this chart of how many Japanese yen the US dollar can purchase gives one a good idea of the strength, and as impressive as it is it does not tell the whole story. When one says 21.30% though, that tells the whole story because it is not often that currencies move that much in a 12 month period.

Source: CNBC

We have economic news today, and it is as follows:

  • MBA Mortgage Index (7:00 a.m. EST): Est: N/A
  • ADP Employment Change (8:15 a.m. EST): Est: 200k
  • Trade Balance (8:30 a.m. EST): Est: -$44.0 B
  • ISM Services (10:00 a.m. EST): Est: 57.1
  • Crude Inventories (10:30 a.m. EST): Est: N/A
  • Fed's Beige Book (2:00 p.m. EST): Est: N/A

The Asian markets are lower today:

  • All Ordinaries - down 0.93%
  • Shanghai Composite - down 0.01%
  • Nikkei 225 - down 0.34%
  • NZSE 50 - down 0.09%
  • Seoul Composite - down 0.74%

In Europe, markets are mixed today:

  • CAC 40 - down 0.03%
  • DAX - up 0.43%
  • FTSE 100 - down 0.05%
  • OSE - up 0.17%

PPL Corporation Completes Spin-off

Shares in PPL Corporation (NYSE:PPL) were lower yesterday after the completion of the spin-off of Talen Energy (NYSE:TLN). As previously announced, PPL Corporation spun-off assets to form Talen and combined them with assets owned by Riverstone Holdings which resulted in Riverstone owning 35% of Talen and PPL shareholders owning 65%.

Talen shares were also lower yesterday, as is typical for spin-offs. There were some negative comments in reports and market commentary that we read yesterday that focused on the merchant power business and the toll that competition is taking on these companies. Talen is now the third largest merchant power generator in the United States, behind only Calpine (NYSE:CPN) and NRG Energy (NYSE:NRG).

Amazon Offers Free Shipping

As it steps up pressure on rivals ranging from eBay (eBay) to Etsy (NASDAQ:ETSY), Amazon.com's (NASDAQ:AMZN) latest move is to offer free shipping on smaller items to non-Prime members and on orders that do not meet the current minimum order size to qualify for free shipping. Anything weighing 8 ounces or less will be covered by the program and Amazon will ship orders from a new fulfillment center in Kentucky that will focus on this new initiative. It is expected that many of the orders will relate to third party vendors, which makes us wonder whether this new service will appeal to certain Etsy retailers who sell photos, postcards, small prints and other light items.

While the program will most likely steal market share online from eBay as well as from brick and mortar discounters such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), it will not result in profitability. This is just another move to bring more consumers to Amazon in an effort to sell more goods and services, including Prime memberships.

HP Split Effective November 1st

Hewlett-Packard (NYSE:HPQ) CEO Meg Whitman announced at the HP Discover 2015 event in Las Vegas that the company's split into HP Inc. and Hewlett-Packard Enterprise would be effective November 1, 2015. As previously announced, the enterprise division will hold the growth assets with the company's server and services segments driving results and the computer and printer business will be put into HP Inc. While HP Inc. will be the larger company, our guess is that shareholders will elect to initially sell those shares and focus instead on the Hewlett-Packard Enterprise holding.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.