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IBDvalueinvestin (99.67)

First watch Macys Thanksgiving Parade on FOX , then join the Black Friday buying spree.

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November 24, 2009 – Comments (7)

Stock watchers keep eye on Black Friday store sales Updated

('11/24/2009 12:00 PM')

Look for an upside surprise in retailer sales :

( AEO, ARO, BBY, GES, JCP, JNY, JWN, LTD, M, MW, PLCE, TGT, TIF, WMT )

By Adam Shell, USA TODAY NEW YORK — How frequently cash registers scream ka-ching on Black Friday and the rest of the holiday shopping season could determine if investors will continue to see profits in their stock portfolios.

With the economy trying to shake off a nearly 2-year-old recession, and with stocks up more than 60% since early March after Monday's 1.4% rally, the next catalyst for stocks could be the all-important holiday gift-buying season.

 

BLACK FRIDAY: Your guide to the best deals

Since consumers account for nearly 70% of U.S. economic activity, readings on retail sales over the final five weeks of 2009 will provide investors with a glimpse into the health of the economy and the ability and willingness of consumers to open their wallets and spend. More important, how holiday sales go could offer clues as to whether the fledgling economic recovery is sustainable.

"This year Black Friday (and holiday) sales will have a little extra meaning," says Timothy Vick, a portfolio manager at Sanibel Captiva Trust. "Investors are looking at the Christmas shopping season as the first barometer to see if the consumer is patching up" their finances.

Without a rebound in consumer spending, Vick says, it will be harder to sustain economic growth and the budding recovery in corporate earnings.

U.S. consumers are expected to spend $437.6 billion in the November and December period, a 1% drop from $442 billion last year, according to the National Retail Federation. Six out of 10 consumers (61%) said they would only buy goods "on sale," a survey by NPD Group found.

Rick Bensignor, chief market strategist at Execution, downplays the impact of the holiday sales season, arguing that the market is being driven by other key catalysts, such as the declining value of the dollar, which has fueled risk-taking in stocks.

While few on Wall Street expect a super sales season, any major surprise could move markets.

"Black Friday will be very important and could be one of the most significant (year-end) events," says Sung Won Sohn, a finance professor at California State University. "If sales exceed expectations it would be a shot in the arm for financial markets. On the other hand, if sales turn out to be worse than expected, the market will be disappointed."

 

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Robust sales would deliver a positive message about consumers' state of mind, says Quincy Krosby, a market strategist at Prudential Financial. Consumers have been hard hit by the recession, job losses, falling home values, tight credit and high debt.

"It will send a signal that the consumer has a bit more confidence in the economy and the job landscape," Krosby says.

Krosby will be watching to see if parents are snapping up "must-have gifts" for kids: "If you don't see those must-haves selling, then you know the American consumer is still worried."

7 Comments – Post Your Own

#1) On November 24, 2009 at 1:59 PM, IBDvalueinvestin (99.67) wrote:

Another upside for retailers is that Black Friday falls on a Muslim Holiday this year so you will also get an added Sales Boost in areas with a large Muslim population . Dearborn,-Michigan, NYC, Paterson-NJ, Los Angels-CA etc 

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#2) On November 24, 2009 at 2:00 PM, djkumquat (47.44) wrote:

i'm going for a hike that day, then catching the blazers game in the eve. if i do any shopping on friday, it'll be to at the grocery store. no matter what time you go, stocking up on food on black friday is like doing grocery shopping at 10pm - with everyone else at the mall, you practically have the store to yourself!

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#3) On November 24, 2009 at 2:01 PM, djkumquat (47.44) wrote:

muslims go shopping on holidays?

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#4) On November 24, 2009 at 2:08 PM, IBDvalueinvestin (99.67) wrote:

djkumquat , I have a Muslim co-worker. They have to give a certain percentage of their yearly salary as a gift during the holiday's its part of their beliefs. So they have no choice..

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#5) On November 24, 2009 at 2:14 PM, dragonLZ (99.57) wrote:

Muslims don't go shopping on their holidays, but do go shopping right before the holidays (just like evrybody else)...

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#6) On November 24, 2009 at 2:19 PM, IBDvalueinvestin (99.67) wrote:

POLL says Black Friday turnout to jump 16%

(dragonLZ you think the Muslim Holiday falling on Black Friday has anything to do with this jump?)


Survey says number of people 'definitely' heading to stores increasing to 57 million from 49 million in 2008.

NEW YORK (CNNMoney.com) -- The number of people shopping on Black Friday is expected to pick up more than 16% this year, according to a survey released Tuesday.

A staggering 57 million people said they would "definitely" head to stores on the day after Thanksgiving, up from 49 million in 2008, according to a survey by the National Retail Federation.

An additional 77 million said they would wait to decide after seeing the weekend deals.

And they could be persuaded, according to NRF president Tracy Mullin.

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#7) On November 24, 2009 at 2:33 PM, IBDvalueinvestin (99.67) wrote:

dragonLZ we would shop on Christmas day to if the stores were open. But there not for us, the Muslims got lucky this year , all stores are open on their holiday so no one has an excuse why they didn't get a gift.

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