Our theme of E-Commerce Stocks which is comprised of U.S.-based e-commerce companies as well as logistics and payment players, has had a tough 2022, declining by almost 50% year-to-date, compared to the Nasdaq-100, which remains down by 29%. The big e-commerce surge that was seen through the lockdown phase of the Covid-19 pandemic is now cooling off, and this is reflected in revenue growth rates and stock prices in the theme. For example, e-commerce bellwether Amazon is guiding for net sales growth of just between 3% and 7% for Q2 2022, compared with the second quarter of 2021. These numbers include sales of its fast-growing cloud computing business, meaning that the e-commerce business will likely fare worse. Moreover, the ongoing supply chain issues, labor shortages, and surging inflation are also impacting e-commerce players in more ways than one. While these issues have driven up costs for e-commerce and logistics players, it is hurting the demand side as well, as inflation puts pressure on household budgets, impacting consumer confidence. For perspective, the lower end of Amazon’s operating income guidance points to a loss in Q2.
So what’s the outlook like for e-commerce stocks? We think near-term returns could remain limited, given the concerns about the broader U.S. economy, with the Federal Reserve raising rates at a more aggressive pace. That being said, the long-term outlook remains intact, as the Covid-19 pandemic has accelerated the trend of online shopping and the changes in consumer behavior should benefit e-commerce-focused companies. Within our theme, Carvana stock (NASDAQ:CVNA) has been the weakest performer, declining by about 90% year-to-date. Wayfair (NYSE:W) has also declined considerably, falling by 74% year-to-date. On the other side, logistics players FedEx stock (NYSE:FDX) and UPS stock (NYSE:UPS) have fared a bit better, declining by about 13% and 16%, respectively.
While e-commerce players are gaining at the expense of brick-and-mortar retailers, check out our theme of Fintech Stocks for a list of companies that could potentially disrupt the $1.5 trillion-plus U.S. insurance and financial services industry.
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|S&P 500 Return||1%||-20%||71%|
|Trefis Multi-Strategy Portfolio||3%||-21%||211%|
 Month-to-date and year-to-date as of 7/12/2022
 Cumulative total returns since the end of 2016