So far this year, Amazon has added $620bn to its market cap versus $1.12 trillion in market cap declines for the rest of the current S&P 500 membership that was trading at the end of 2019. 357 companies have seen declines in market cap YTD, totaling $3.3trn. In short, equity market cap is consolidating dramatically into the top of the index. A similar process has been underway in economic data. For Q1, the Census reported e-commerce sales topped 11% of total retail sales for the first time, a 0.5% increase versus Q4 of 2019. That increase in share was the largest ever and is indicative of how much market share is being gobbled up by Amazon and a few other e-commerce giants. From an equity market return perspective, huge gains for Amazon are totally consistent with the big underperformance of our Death By Amazon Index over the past few months. Distress leading to de-listings has also mounted, as measured by four different names coming out of our Death By Amazon Index this month.
Our “Death By Amazon” index was created many years ago to provide investors with a list of retailers we view as vulnerable to competition from e-commerce. In 2016, we also created our “Amazon Survivors” index which is made up of companies that look more capable of dealing with the threat from online shopping. To see how the two indices have been performing lately and view the full list of stocks that make up the indices, please read our newest report on the subject available to Bespoke Premium and Bespoke Institutional members.