Aussie investors get jittery about Amazon juggernaut

Australian shares look set for a modest start to the week with investors keeping a close eye on online juggernaut Amazon, amid fears it will send retail stocks plunging.

The Australian stock futures market is predicting a nine-point advance at today’s opening after the local sharemarket edged higher at last week’s close driven by a strong week for the major banks.

Modest gains in oil and metal prices as well as a mixed US market where technology stocks continue to tick higher will also provide support for local shares, CommSec chief economist Craig James said.

“But everyone around the world is mainly concerned about Amazon and its movement into the market,” he said.

The retail giant, which is due to arrive in Australia in the next 12 months, on Friday bought grocery store operator Whole Foods in a deal valued at about US$13.7 billion ($18.9 billion), including debt.

The deal comes a month after Whole Foods announced a board shake-up and cost- cutting plan amid falling sales.

James said retail stocks were lower in both the European and US markets on the back of a mounting concern about the dominance of Amazon, that has already wooed hordes of shoppers and wreaked havoc on department stores.

“That may be an issue in terms of our market on Monday,” he said.

“I think it is something that will exercise the minds of investors about retail stock and how prepared our retailers are for the arrival of Amazon.”

James said recent local retail stocks have been a “little bit softer” on the back of the looming arrival of the online retailer to Australia.

“It is certainly a focus at the moment.”

Meanwhile the Australian dollar remains in “comfortable territory” on the back of weaker than expected US housing stats and doubts over whether the US Federal Reserve will be lifting interest rates over the remainder of the year.

“As a result all the major currencies were higher against the greenback,” James said.

Key Australian economic figures will also be released this week for car sales, house prices and business sales.

But investors will be most interested in the RBA’s discussion panel today, hoping for fresh comments on the housing sector and the job market. “Overall there is nothing too much to write home about.”