Shopify (SHOP) Just Confirmed Our Worst Fears About This Market

TL;DR

Shopify's earnings report and guidance indicate a recession in the United States economy, with potential further decline in the future.

Transcript

shopify's earnings or more specifically their guidance confirmed what we've already known and talked about over here on the investor channel and that is the united states economy is in a recession right now and it's probably going to get worse before it gets better and we'll talk about that on today's show in the context of shopify's earnings what ... Read More

Key Insights

• 🇺🇸 The United States economy is currently in a recession, as confirmed by Shopify's earnings report and the performance of other e-commerce companies.
• 🫢 Consumers are cutting back on discretionary spending due to inflation and increased gas prices.
• 🙈 Discount stores like Costco are seeing sales growth, indicating a shift in consumer behavior towards more value-oriented purchases.

Questions & Answers

Q: Why did Shopify's stock value decrease by 70% this year?

Shopify's earnings report and guidance showed missed expectations and lowered projections, indicating a decline in the company's performance and leading to a drop in its stock value.

Q: What are the indications that the United States economy is in a recession?

The earnings reports and guidance of e-commerce giants like Amazon, eBay, and Netflix all point towards a contraction in consumer spending, with consumers pulling back on discretionary expenses due to inflation and higher gas prices.

Q: How are discount stores like Costco faring in this economic downturn?

Discount stores like Costco are actually experiencing growth in sales, as consumers prioritize getting the most value for their money during the economic downturn, resulting in increased shopping at these types of stores.

Q: How might the missed expectations and lowered guidance of various e-commerce companies impact the stock market?

The missed expectations and lowered guidance from e-commerce companies like Shopify, Amazon, eBay, and Netflix could lead to further decline in the stock market, particularly if gas prices and inflation remain high in the coming months.

Summary & Key Takeaways

• Shopify's stock has plummeted, down 70% year-to-date, indicating a significant decline in value.

• E-commerce sites like Amazon, eBay, and Netflix are all experiencing missed expectations and lowered guidance, suggesting consumer spending contraction.

• Consumers are pulling back on discretionary spending, as evidenced by higher gas prices and increased shopping at discount stores like Costco.