HOLIDAY SALES: Black Friday and Cyber Monday Thanksgiving weekend retail sales results are in. They were solid, a relief, but reflected covid disruptions. Stronger numbers are forecast ahead. Global supply chain disruptions meant less inventory, and 8% less discounts to attract shoppers. Whilst inventory and labour disruptions drove an earlier start to the festive shopping season. This supports the consumer discretionary (XLY) outlook, focused on specialty retail and e-commerce. See related thematic Smart Portfolio’s @ShoppingCart and @FashionPortfolio.
TRENDS: According to the US National Retail Federation: 1) average long-weekend spending fell 3.4% to $312 per person, equal to one-third of estimated festive spending. 2) In-store traffic rose 14%, whilst online sales fell 12% on eased lockdowns. 3) Top categories were clothing /accessories (51% of total), toys (32%), gift cards (28%), and books/music/video games (27%). Overall November and December sales are forecast up a record 8.5%-10.5% versus last year.
CONSUMER: The US consumer is supported by 5% wages growth; jobless near pre-pandemic levels; high housing, equity, crypto assets all boosting the ‘wealth effect; and ‘excess’ pandemic savings estimated at over $2 trillion (10% of GDP). This more than offsets rising inflation fears. The US consumer is well-positioned, driving 70% of the US economy, and the greatest single pillar of the global economy. This is increasingly important as virus concerns rebound again.
TODAY: Fed’ Powell speaks to Congress again. His more hawkish comments on accelerating bond tapering and that inflation no longer transitory recognised reality, but still spooked markets.
All data, figures & charts are valid as of 30/11/2021