FOREX.com | Nov 21, 2017 15:14
This Friday the notorious ‘Black Friday’ shopping spree will take place after the US Thanksgiving holiday. While this is now a global event, we are focussing on the US due to some UK retailers’ reluctance to participate in the heavy discounting that it often entails. Retailers are trying to out-do each other with bargains, however the one to watch is the ongoing battle between the traditional bricks and mortar retailers and the online giants.
Hope for the traditional retailers?
Usually one assumes that the online giants will grab all the headlines (and upside stock price potential) around the Black Friday period, as surely they will see sales surge more than any traditional retailer would. While this is most likely true, and the likes of Amazon (NASDAQ:AMZN) are expected to eclipse their traditional rivals especially in overall sales and discounts, there is still hope for the bricks and mortar retailers.
Chart 1 below shows the Conference Board consumer sentiment index;the retail sector of the S&P 500 and Amazon. The chart has been normalised to show how these three variables have moved together over the last year. This chart suggests a few things:
So, if we can assume that the relationship between consumer confidence and retailers will hold, and if we also assume that Amazon is less sensitive to Black Friday, which retailers should we be looking at this Turkey Day?
Overall, we are cautiously optimistic as we head into Black Friday that traditional US retailers could benefit as consumer confidence remains strong. As you can see above, some retailers are in a better position than others, and while it’s tempting to only think that Amazon could benefit this Turkey Day, there are other retail bargains to be found.
h3 Amazon (yellow), Conference Board consumer confidence (white), and S&P 500 retail sector (orange)/h3Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
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