🧐🛒 First Look: Black Friday Shopping Data Came Back
Welcome to the Sunday Primer,
Hope you had an amazing Thanksgiving/Black Friday. We have a preliminary look into some of the data that came back surrounding Black Friday shopping that we’re sure you’ll find interesting. As more data comes out, you’ll really get to see how BF has changed over the years as we’ve shifted most of our shopping online and spread out our shopping over a longer period of time.
- Humphrey, Rickie & Tim
Market Report
Release of the October Fed Minutes
On Wednesday, the October Fed minutes were released and gave investors a better idea of how Fed officials were thinking about monetary policy moving forward. In general, the Fed concluded that they should soon moderate the pace of interest-rate increases to mitigate risks of overtightening.
They also signaled that they were leaning towards a 50 basis-point hike in December. Something interesting that we found was that Fed staff told officials during the FOMC meeting that the risks of a recession had grown to almost 50-50.
This was the first recession warning since the central bank began raising rates in March. Investors expect the Fed to raise rates by 50 basis points when they meet Dec. 13-14 and see rates peaking around 5% by mid-2023.
Black Friday Shopping Data
This year, people spent $5.3 billion online on Thanksgiving Day, up 2.9% from the holiday last year, according to Adobe Analytics. E-commerce spending on Black Friday rose 2.3% to $9.12 billion. While these numbers show positive growth, inflation is still at almost 8%, so we’re actually seeing a decline in “real” spending.
Salesforce found that the average consumer discount on Black Friday was greater than 30%, up from 28% last year and close to the 33% rate in 2019. The biggest deals were on home appliances, apparel, and health and beauty.
According to the National Retail Federation, people in households that earn less than $75,000 a year are expected to spend less than last year, an average of $606. Meanwhile, people in households that make over $150,000 a year plan to spend more, an average of $1,304. There’s been a divergence in spending as wealthier people continue to buy luxury goods (which haven’t seen much inflation), while other people are trading down from pricier options in favor of cheaper alternatives.
People are increasingly shopping on credit. Credit card balances jumped 15% compared to a year earlier, according to the Federal Reserve. That's the largest increase in more than 20 years. Adobe Analytics also found a 13% increase in people choosing buy-now-pay-later plans compared to last year.
The bottom line is that even though consumer spending on Black Friday seemed good, when you factor in inflation and how people paid for their purchases, it reveals a darker side behind the numbers.
Forecast Ahead
Corporate Earnings (Throughout Week)
Monday, November 28th - Pinduoduo (PDD), AZEK Company (AZEK)
Tuesday, November 29th - Bilibili (BILI), Hibbett Sports (HIBB), Carlyle Group (CG), CrowdStrike (CRWD), Intuit (INTU), Workday (WDAY), Hewlett Packard Enterprises (HPE)
Wednesday, November 30th - XPeng (XPEV), Petco (WOOF), Hormel Foods (HRL), Build-A-Bear Workshop (BBW), Salesforce (CRM), Snowflake (SNOW), Splunk (SPLK), Okta (OKTA), Five Below (FIVE), Victoria’s Secret & Co (VSCO), La-Z-Boy (LZB)
Thursday, December 1st - Dollar General Corp (DG), Kroger (KR), Big Lots (BIG), TD Bank Group (TD), Marvell Technology (MRVL), ChargePoint (CHPT), ULTA Beauty (ULTA), UiPath (PATH), Tilly’s (TLYS)
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What We Read Last Week
Inside the Saudi Strategy to Keep the World Hooked on Oil (New York Times)
Global Oil Market Flashes Warnings as Demand Concerns Spike (Bloomberg)
IPO Hole is Partly Plugged by $24 Billion Burst in Share Sales (Bloomberg)
The Crypto Traders Who Predicted and Profited From the FTX Implosion (The Information)
Falling house prices will help the Fed tame inflation - but they also increase the risk of a prolonged economic downturn (Business Insider)