Contrarian Stock Market Investing News - Featuring Bargain Stocks » Black Friday Sales

PPI and Retail Sales Dominate The Calendar

Christian Hill — Mon, 08 Dec 2008 14:30:40 +0000

The economic calendar starts very slow this week, with only the Pending Home Sales report coming on Tuesday. Once Wednesday morning rolls around, it’s a mad dash to the finish with 11 reports coming in the last three days of the week.

The reports that matter most come on Friday morning before the market opens.

Friday is when the PPI and Core PPI figures for November are announced, and it is a mixed bag. The Core PPI figures (which exclude food and energy costs) are expected to show a modest increase of 0.20 percent. The PPI figure is expected to show a decline of nearly two percent. This is the direct result of the continued slide in energy prices. The price for energy goods dropped 12.8 percent in October, and I would expect a similar drop this month.

Simultaneous to the PPI announcement on Friday morning are the Retail Sales figures for November. Not surprisingly, the report is expected to show another decline, although not as bad as the October report. With limited access to credit, consumers aren’t buying much right now even though we are approaching the holiday season. The report could get a slight upward bump due to slightly better than expected Black Friday sales. The real interesting report will be next months’ when all holiday sales are figured in.

The final bit of information this week is the December Michigan Sentiment Report. Somehow, someway, in the face of a recession, the report is expected to post an increase this month. It must be the holiday cheer.

Source: PPI and Retail Sales Dominate The Calendar

Black Friday, Cyber Monday Fail to Allay Retail Anxiety

Jason Simpkins — Tue, 02 Dec 2008 16:45:22 +0000

Steep holiday discounts and bargain hunting boosted Black Friday sales, but a dour economic outlook leaves analysts skeptical that Americans will be able to sustain their buying frenzy for the duration of the holiday season.

Spending over the four-day Thanksgiving weekend rose 7.2% from a year ago to about $41 billion, according to the National Retail Federation (NRF). However, a shorter holiday shopping season and frugal shoppers could soon drive retail sales back down to their pre-holiday lows.

“Pent-up demand on electronics and clothing, plus unparalleled bargains on this season’s hottest items helped drive shopping all weekend,” said NRF President and CEO Tracy Mullin. “Holiday sales are not expected to continue at this brisk pace, but it is encouraging that Americans seem excited to go shopping again.”

The NRF continues to forecast a mild 2.2% jump in holiday sales, the smallest gain in six years.

Several details in the NRF report underscored the group’s apprehension. For instance, more than half of the 110 million holiday shoppers that braved the elements this weekend went to discount retailers like Wal-Mart Stores Inc. (WMT). Shoppers also took advantage of so-called “door buster” sales that offered products at extraordinary discounts to early morning customers.

More than 23% of the 73.6 million shoppers that hit stores Friday were in the door by 5 a.m. More than half, 57.6%, were at stores by 9 a.m.

Early-bird specials may have provided a nice boost to Black Friday sales, but offering goods at such cheap prices could backfire by marginalizing profits.

“You’re looking at discounts of 50% to 70% off,” Matthew Katz, managing director in the retail practice of advisory and restructuring firm Alix Partners, told the New York Times. “You have to sell two to three times as much to break even.”

Retailers cannot continue to offer shoppers such steep discounts, and consequently, will find it difficult to keep their attention. That is especially true this year, as thrifty consumers have taken a more targeted approach – swooping into stores for the things they want and retreating without taking the time to browse for additional items.

“Shoppers definitely have a mission this year,” Marshal Cohen, chief retail analyst for NPD Group, told CNN. “They are serious about finding the best deals. They are very budget conscious, they’ve done their research and then they’ll go home.”

Also, this year’s holiday shopping season is five days shorter than last year. Consumers have just 27 days to shop this year, as opposed to 32 in 2007.

Analysts will get another glance into the psyche of the American consumer tomorrow (Tuesday) as sales data emerges for “Cyber Monday,” the unofficial kickoff of the online holiday shopping season.

Initial results showed a 2% increase in online sales over Thanksgiving and Black Friday, and the NRF said it expects another 84.6 million people to take their bargain hunting online Monday. According to a Nielsen Online survey, 36% of consumers will spend half of their shopping budgets on the Web, up from 32% last year.

Internet vendors are prepared for the online rush by offering discounts of their own, as well as free shipping, to potential customers.

The NRF’s eHoliday Survey showed that nearly 84% of online retailers will offer a special promotion on Cyber Monday, up from 72% last year. Nearly 39% of online retailers plan to offer specific deals, while 33% will offer e-mail campaigns and 25% one-day sales. About 23% will offer free shipping on all purchases.

“Online retailers have been planning their Cyber Monday promotions for months and are eagerly waiting to debut these deals to shoppers,” said Scott Silverman, executive director of Shop.org, an online division of NRF. “As shoppers focus on price this holiday season, online retailers will be extremely competitive to offer the very best deals. Americans who are looking to put a dent in their holiday shopping will be able to find thousands of bargains on Cyber Monday.”

Of course that’s not to say it will be any easier for online outlets to draw a crowd. Consumers may be planning to spend a greater portion of their budgets online, but overall those budgets have shrunk.

For the first 23 days of November, holiday online spending reached $8.2 billion, a 4% decline compared to the corresponding days last year, when online sales hit $8.5 billion, according to online marketing research firm, comScore.

“There was an optimism going into the holiday season that online would weather the storm a little bit better,” Jessica Ried, associate director of research for Resource Interactive, an online-marketing consultancy told TIME magazine. “But this year in November we’ve seen the first online sales decrease ever.”

“I don’t know that this is the only prediction to go by,” Ried added, “but a dire prediction from an organization as big as comScore does give retailers pause.”

Source: Black Friday, Cyber Monday Fail to Allay Retail Anxiety

Wall Street Slips on Retail Jitters, Energy, Tech

Contrarian Profits — Fri, 28 Nov 2008 16:56:15 +0000

U.S. stocks open slightly lower in thin holiday trade… Retailers fall on worry about weak “Black Friday” sales… Energy shares pressured as oil prices slip below $53

U.S. stocks slipped in thin holiday trade on Friday after a streak of gains as investors nervously eyed post-Thanksgiving sales to gauge how retailers will fare this holiday season, while worries about global demand hurt technology and energy shares.

Chevron (CVX) fell 1.9 percent tracking oil lower as OPEC gathered to discuss potential further supply cuts to combat falling demand. U.S. crude dropped below $53 a barrel.

Technology shares slid after signs of a downturn in global chip demand as STMicroelectronics cut its fourth-quarter outlook. Industry sources said Taiwan companies want to slash costs. The semiconductor index shed 1.1 percent.

The U.S. stock market was closed Thursday for the Thanksgiving holiday and is trading for half the day on Friday. On Wednesday, stocks ended higher, capping the Dow’s biggest four-day percentage gain since 1932.

Stores across America hope to ring in billions of dollars in holiday sales beginning on the “Black Friday”, the day after Thanksgiving. But retailers fear a looming recession and mounting job losses could cost them dearly during the period that brings in up to 40 percent of annual sales.

“It’s a light volume day so you’re going to see some choppy trading, with so many people out,” said Robert Finkel, consumer trader at Stifel Nicolaus in Baltimore.

“I’m watching how things go from a retail standpoint today – we’ve heard a lot of speculation about how bad it’s going to be, now we’ll get some proper feedback.”

The holiday weekend will test the strength of consumer sentiment, a main driver of the U.S. economy, as the country faces its worst financial crisis since the Great Depression.

The Dow Jones industrial average fell 2.39 points, or 0.03 percent, to 8,724.22. The Standard & Poor’s 500 Index was down 2.39 points, or 0.27 percent, at 885.29. The Nasdaq Composite Index shed 14.26 points, or 0.93 percent, to 1,517.84.

The S&P’s retail index dipped 1.6 percent.

Chesapeake Energy Corp (CHK) fell 14.7 percent to $17.26 after a shelf offering to issue up to 50 million shares.

U.S. aluminum company Alcoa Inc’s (AA) fell after an executive said the company is not actively seeking to raise its stake in miner Rio Tinto Ltd (RIO) .

There is no U.S. economic data due on Friday nor any major companies scheduled to report earnings.

For the month, the Dow is down more 6 percent, the S&P 500 down more than 8 percent and Nasdaq down 11 percent.

By Kristina Cooke
NEW YORK, Nov 28 (Reuters)