Today marks the unofficial start of the holiday shopping season as investors size up Black Friday to determine the current mood of the U.S. consumer. With an inflationary backdrop overshadowing the shopping bonanza, shoppers will be looking around for bargains to take advantage of the value pricing. While strong balance sheets are said to be the norm for many households, others will supplement spending with savings and credit, in a holiday season cycle that is being described as anything but typical.
Snapshot: There are many economic indicators out there for gauging the power of the consumer, like retail sales, retail earnings and the closely-followed University of Michigan Consumer Sentiment Index. All these can help forecast the future trajectory of the sector and broader economic landscape following a bruising year for the industry. The S&P 500 Consumer Discretionary Index Sector (SP500-25) - a group of companies that reflect spending on items like apparel and home improvement to restaurants and vacations - is down 33% YTD, more than double the 16% decline of the broader S&P 500 Index (SP500). "These stocks are a clue as to how fast the economy is slowing and whether slowing inflation is lifting confidence on Main Street," noted Jim Paulsen, chief investment strategist at the Leuthold Group. Want to bet on Black Friday and Cyber Monday results? Here are some ETFs to watch
Holiday shopping trends are also flashing mixed signals this year, with 166.3M people (almost 8M more people than last year) expected to shop from Thanksgiving Day through Cyber Monday. That's according to the latest report from the National Retail Federation, which estimates consumers will shell out an average of $832.84 on gifts and holiday items, down from the $997.73 seen in 2021 (and less purchasing power because of inflation). Holiday retail sales during November and December are forecast to grow between 6% and 8% over 2021, compared to the 13.5% jump seen last year, though some of the results may be skewed as deals and promotions continue to be pulled forward. Revenge of the malls: Retailers rally after earnings suggest holiday sales may be better than feared
Black Friday schedule: The stock market will shut early at 1 p.m. today, bond markets will close an hour later, while metals and U.S. crude oil will settle at 12:30 p.m. and 1:30 p.m., respectively. Some history... Back in 1992, the major U.S. exchange operators called for a 2 p.m. Eastern close for the Friday after Thanksgiving, two hours earlier than the regular close at 4 p.m. The following year, the NYSE and Nasdaq chose to shutter markets at 1 p.m., a schedule that is currently observed.
ETFs: NYSEARCA:XLP, NYSEARCA:XLY, NYSEARCA:VDC, NYSEARCA:XRT, NYSEARCA:VCR, NYSEARCA:IBUY, NYSEARCA:FSTA, NYSEARCA:FDIS, NYSEARCA:RHS, NASDAQ:RTH, NYSEARCA:RETL, NYSEARCA:PBJ, NYSEARCA:IYC, NYSEARCA:EMTY, NYSEARCA:FXG, NYSEARCA:PEJ, NYSEARCA:IYK, CLIX, NYSEARCA:FXD, NYSEARCA:ONLN, NASDAQ:PSL, NASDAQ:PSCC, NYSEARCA:UCC, NYSEARCA:RCD, NYSEARCA:SCC, NYSEARCA:WANT, NASDAQ:PSCD, NYSEARCA:UGE, NYSEARCA:SZK, JHMS, FTXD, NASDAQ:FTXG, JHMC