Friday, August 28, 2020

Will Amazon Halo Be Bad for Fitbit’s Health?

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News shaping
the markets today

     

What’s happening: Amazon.com, Inc. announced the launch of a new fitness and health device on Thursday.

What happened: The fitness tracker and smartwatch market is already very a highly crowded space with products from companies like Apple, Fitbit, and Garmin.

With the announcement of its new low-cost entry device named Amazon Halo, Amazon is expected to give a tough fight to its peers in the segment.

What are the features: Amazon’s Halo Band will have a battery life of seven days and can get fully charged within 90 minutes, the ecommerce giant said. The new device will be available for pre-order for just $64.99, including a Halo membership for six months, which can be renewed for $3.99 per month. The "early access" offer will provide customers a discount on the eventual cost of $99.99.

Amazon will collaborate with the American Heart Association and other major health organisations for providing some features to its customers. The device will also offer a new tone feature, which can detect the user’s mood through microphones. The app can measure body fat percentage just through user’s photographs.

The company’s partnership with Weight Watchers will allow its customers to link their accounts and all activities on the fitness device will be converted into FitPoints. Weight Watchers is also planning to run a promotional offer that will provide its users a chance to get a Halo device for free.

Why it matters: With this move, Amazon makes an entry into the fitness tracker segment. The company’s latest announcement comes a day after Fitbit unveiled its new smartwatch with a stress testing feature.

There has been a battle for each new feature in the already crowded fitness tracker and smartwatch market. The Halo brand will give tough competition to the low-cost devices of Fitbit and Garmin.

Amazon said that it plans to use its advances in computer vision and machine learning to enable its health tracking device and app combo to take a comprehensive view of various aspects of the user’s health.

Amazon will be looking to attract new customers for its fitness tracker through its huge base of Prime members. The company’s recent announcement of a new grocery store chain, starting with Los Angeles is also expected to help Amazon add more users to its list.

How shares responded: Shares of Amazon declined 1.2% to close at $3,400.00 on Thursday, but rose 0.2% in extended trading. The stock had recently breached its 52-week high of $3,453.00, and has surged 84% year to date.

What to watch: The fitness device has been introduced with an invite-only early access program in the US. Investors will look out for news on the launch of the device and its availability globally. With Amazon intending to collect a lot of data on users, it is yet to be seen how the company protects user privacy.

The Markets Today

     

European stocks will be in focus today, ahead of a basket of economic reports from the region.

Context: European stocks closed lower on Thursday, following a speech by the US Federal Reserve Chairman Jerome Powell.

Details: Markets assessed a key speech from the Fed’s Chairman, who announced some major changes to the central bank’s monetary policy strategy, in which it can hold interest rates near the 0% level until inflation levels cross the target of 2%.

The pan-European Stoxx 600 index closed lower by 0.6%, with most sectors closing in the negative zone. London’s FTSE 100 fell 0.8%, while the German DAX 30 slipped 0.7% and French CAC 40 shed 0.6% on Thursday.

Among the leading companies, Rolls Royce’s shares declined around 1% after the engine maker recorded a £3.2 billion ($4.2 billion) pre-tax loss for the first half of the year and reported the departure of its CFO.

What to watch: Markets await reports on economic sentiment indicator, consumer confidence, industrial sentiment, and services sentiment from the Eurozone. The economic sentiment indicator is expected to improve to 85 in August, from its previous reading of 82.3. Eurozone’s consumer confidence is projected to rise to -14.7 in August, while industrial sentiment is expected to improve to -14.3. Analysts expect Eurozone’s services sentiment to rise to -24.4 in August, from a reading of -26.1 in July.

Markets will continue to monitor the covid-19 numbers, with total cases surging past 24.3 globally.

Other Markets: US indices trading closed mostly higher on Thursday, with the Dow Jones index and S&P 500 up by 0.57% and 0.17%, respectively, while the Nasdaq 100 slipped by 0.34%.

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market snapshot

     

Futures at 0400 (GMT)

What else to watch today

     

Germany’s GfK consumer sentiment indicator and import prices, France’s GDP growth rate, inflation rate, producer prices and household consumption expenditure, Spain’s retail sales and industrial confidence indicator, Turkey's economic confidence index, Italy’s consumer confidence index, manufacturing confidence index and producer prices, Brazil’s unemployment rate, Canada’s GDP Growth Rate and government budget value as well as the US personal income, personal spending, goods trade balance, wholesale inventories, Chicago PMI, University of Michigan's consumer sentiment and Baker Hughes crude oil rigs.