By Paul Thomas, National Review staff writerThe Federal Reserve’s latest move to support the retail giant Amazon, which is struggling to get back to profitability, is good news for shoppers.
It’s also good news that the Fed has decided to take a tough stance against the company, which has become so dominant in the market that it’s threatening to bankrupt many retailers if it can’t get its act together.
The Fed’s latest action, announced in a pair of new posts on the Federal Open Market Committee’s website, is a move designed to “enhance market liquidity,” a term that’s been bandied about in recent days by Wall Street analysts and traders, to the extent that it appears to be a reference to Amazon’s ability to raise more money to fund its operations.
But the Fed’s decision is less about the company’s ability or willingness to invest and more about how the Fed wants to ensure that the market’s demand for its bonds is sufficiently strong that consumers won’t be tempted to buy the company-created stock that the bank has so far bought with an unprecedented $7.3 trillion in taxpayer-backed bonds.
Amazon’s stock is now up about 13% over the past three weeks, and its dividend has soared by more than 200%.
The company has made a few other big bets that it hopes will pay off in the short term.
But its recent string of success, combined with its recent move to offer a free Kindle e-reader, has convinced investors that the stock could have a long run to prove itself.
In a statement, Amazon said the Fed “has consistently maintained that its actions will help the markets to adjust and that the impact will be limited if not offset by increased volatility and adverse economic conditions in the future.”
The Fed’s announcement is also welcome news for investors in Amazon’s closest competitor, Apple.
Amazon, based in Seattle, has long been considered the best-performing technology company in the world.
Its stock price has doubled in the past year.
The company’s stock has soared more than 20% in the first quarter, and more than 70% since the beginning of the year.
Amazon’s stock price in the latest 12 months has increased by more or less the same amount, according to Bloomberg.
But Apple, with a more volatile market and an all-time high valuation, has been hurt by Amazon’s recent earnings reports.
And it’s hard to see how Amazon can afford to take on Apple any time soon.
Amazon is already getting help from a handful of investors who are also betting big on the company.
Earlier this month, Goldman Sachs, a bank that specializes in money market mutual funds, bought $1 billion in Amazon stock.
Earlier on Tuesday, JPMorgan Chase bought $10 billion in shares of Amazon.
That’s a lot of Amazon stock to bet against, but it’s not as big as some of the big players.
Goldman Sachs is currently backing Amazon shares up about 10% this year, according a person familiar with the matter who spoke on the condition of anonymity to discuss the fund’s position.