Amazon ‘s dismal fourth-quarter forecast means consumer spending is slowing and the long-feared recession that has been weighing on investor sentiment is underway, according to Bank of America. “Outlook for less q/q revenue growth than 2021 suggests consumer recession is already here,” wrote analyst Justin Post in a note to clients Friday. The company said Thursday it anticipates fourth-quarter revenue will be between $140 billion and $148 billion, while analysts surveyed by Refinitiv had expected sales of $155.15 billion. Amazon’s outlook suggests between 2% to 8% growth over last year. That forecast also signals the company’s lowest quarter-over-quarter revenue growth on record, according to Post. Even during the 2008 recession, the technology behemoth saw fourth-quarter sales grow 57% sequentially, he said. Fears of a recession have mounted on Wall Street as the Federal Reserve continues its aggressive rate-hiking campaign. That pressure has forced a rotation out of technology and growth stocks. As of Thursday, the biggest tech giants have lost at least $3 trillion of their combined market caps within a year. Amazon shares have plummeted about 40% year to date, with its market cap standing at $1.034 trillion. Amazon’s guidance signals a weaker holiday season ahead, Post said. He explained that management is anticipating the beginnings of a recession as it faces ongoing foreign exchange headwinds and consumers reassessing their purchasing power, especially among European customers. “We had seen Amazon as one of the few potential acceleration stories in the Internet in 2H’22, but with the weakening consumer in the U.S. and Europe, growth will decelerate in 4Q,” he wrote. — CNBC’s Michael Bloom contributed reporting
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