Dear President Trump: Save These Dying Stocks!

The stock market remains stuck in a narrow range today as Donald Trump prepares for his inauguration.

Trump is taking the highest office in the land on a promise to fight globalization and bring back countless jobs to the American working class. His Twitter criticisms of dozens of companies have already led to new job announcements from the likes of Ford, General Motors, and Walmart.

But if Trump really wants to save the American worker, he has a lot more tweeting to do…

We’re just a few weeks into 2017—and one major market sector is heading for disaster. As recently as 2015, it employed approximately 8 million Americans. But their days on the job could be numbered if current trends continue…

I’m talking about the retail sector.

It’s no secret that brick and mortar retail is collapsing. This is a trend we’ve explored many times before.

But the situation is getting worse every day. Shopping malls are dying much faster than anyone anticipated. As the collapse accelerates, it threatens to shake the entire retail sector to its core. Macy’s, Nordstrom, and Kohls all announced wretched holiday sales last week. Now, Target is getting in on the act.

The big-box discounter surprised investors this week with flagging store traffic and dismal sales. As a result, the stock dropped to levels not seen since 2014.

Now, the entire retail sector teeters on the brink…

Retail stocks were granted a brief reprieve during the post-election rally. But as of this week, most of the stocks that benefited from the rally have given back their gains. The SPDR S&P Retail ETF (NYSE:XRT) split from the S&P in early December. It’s down nearly 5% over the past two months—while the S&P 500 is up 3.5% over the same timeframe.

The villain in this retail story isn’t China or Mexico or anywhere else in the anti-globalization playbook. The retail killer is attacking America from within…

Out of all the disruptors on the market today, no company is crushing its competition more thoroughly than Amazon.com (NASDAQ:AMZN).

A common perception is that Amazon is winning the retail war because people are lazy. And that’s partially true. Why would I want to go to a store, stand in lines, deal with horrible service, and overpay for an item when I can press a button on my phone and magically command my purchase show up on my doorstep 24 hours later?

In that sense, Amazon is the obvious choice. But the company is dominating the retail landscape for another reason: It’s just plain smarter than the competition…

While traditional retailers are attempting to lure you into their stores with coupons and sales, Amazon is sneaking into your home—and your everyday life.

We’ve reached a tipping point in Amazon’s war against its traditional retail competition. Stores are shuttering. Entire shopping malls are closing at an alarming rate. Retail stock prices are suffering. Meanwhile, a $380 billion juggernaut named Amazon is just a short trip from new all-time highs.

I don’t think a tweet from our new president can reverse this trend…

Sincerely,

Greg Guenthner
for The Daily Reckoning

The Daily Reckoning