As the busiest shopping season of the year approaches, consumers are getting ready to open their wallets and swipe their cards away. However, this season is not only exciting for shoppers to get their hands on major purchases, but it’s also one to look forward to by investors and traders.
Echoing this enthusiasm, the National Retail Federation has projected a remarkable surge in holiday spending for 2023. Forecasts suggest an increase of 3% to 4% over the previous year, potentially reaching a staggering total expenditure of between $957.3 billion and $966.6 billion . This reflects robust economic activity and a strong sense of consumer confidence.
As we consider these projections and the growing consumer excitement, our attention shifts to Black Friday’s pivotal role in influencing stock markets, a topic that will be explored below.
How does Black Friday Affect Stocks?
Black Friday is not only one of the most important spending events in the United States, but also the name was given to the first day after Thanksgiving. Every holiday season, forecasters make predictions about the volume of sales on Black Friday, and whether or not those expectations are reached or surpassed can affect investor confidence.
It can also be a reflection of the current state of the economy. If consumers are tightening their belts, especially given the rising inflation, there could be a possibility of retail sales being dampened this Black Friday, hampering consumer sales figures.
Suppose consumers end Thanksgiving on a high by spending a lot of money on Black Friday, and retailers show substantial growth in sales figures. In that case, investors may have their first indication that the holiday shopping season is looking like it’s going to be particularly profitable, with consumers being willing and able to spend more money. This confidence can be reflected in the retailers’ stock prices that post strong sales.
Here are some of the stocks that could get a boost on Black Friday :
1. Walmart (NYSE: WMT)
Walmart Inc. is a multinational retail corporation based in the United States that currently runs a chain of hypermarkets, discount department stores, and grocery stores.
During times of inflation when there is a need for people to tighten their belts, consumers’ spending behaviour tends to lean towards low-cost shops. Some discount and larger retailers have benefited from such behaviour.
Frequent shoppers at Walmart will be glad to know that Walmart’s Black Friday have kicked off with several events offering significant savings. The first event started online on 8 November and continued in stores from 10 November. The second event is set to begin online on 22 November, extending into stores starting 24 November. These events present ample opportunities for customers and Walmart+ members to take advantage of substantial discounts.
2. Amazon (NASDAQ: AMZN)
Amazon is the world’s largest online retailer and a prominent cloud service provider. They sell all sorts of things including books, music, movies, housewares, electronics, toys and many other goods.
Amazon’s Prime membership has grown to over 200 million and the company has mentioned in its recent earnings report that members are spending more. More spending means more revenue for the company. Amazing early discounts are already underway!
Amazon Black Friday deals have already started on 17 November with sales event and deals and will be ongoing through Cyber Monday, 27 November. Customers can expect deep discounts across categories including electronics, toys, home, fashion, beauty, and Amazon devices.
3. Target (NYSE: TGT)
Target Corporation is an American big box department store chain with stores in all 50 U.S. states. They are known for selling a variety of food, household goods, clothing and electronics.
As the holiday season approaches, particularly during events like Black Friday, Target typically sees a significant increase in consumer traffic both in-store and online. Their well-curated selection of products, combined with attractive discounts and promotional deals, will help to position them to potentially capitalise on the seasonal shopping surge.
On 16 November, Target announced its Black Friday week deals, set to begin on 19 November and run through 25 November. Shoppers can expect to find discount on a selection of technology products and toys. Additionally, there will be discounts on a diverse array of apparel and accessories as well. This year’s sale also stands out for its extensive range of deals on groceries and everyday essentials, catering to a broad spectrum of consumer needs.
4. Macy’s (NYSE: M)
Macy’s is an American chain of high-end department stores known for selling a wide range of merchandise, including apparel and accessories for men, women and children, cosmetics, home furnishings and other consumer goods. This Black Friday, Macy’s stocks could get a boost because they have prepared a lavish array of deals from the latest winter essentials, to that new air fryer you’ve been eyeing!
Macy’s Black Friday early access to deals started on 10 November and will be running until 25 November, aim to offer customers a combination of top brands, exceptional value, and inspiration. To enhance the shopping experience, Macy’s has introduced a hassle-free feature, the Holiday Gift Finder, designed to assist customers in easily selecting from a curated assortment of gifts.
5. Lululemon (NASDAQ: LULU)
Lululemon is a Canadian multinational athletic apparel retailer known for making technical athletic clothes for running, yoga, working out and other types of sports. The company’s commitment to building a community extends beyond selling athletic apparel; it focuses on fostering a culture of wellness and personal growth. This approach has enabled the brand to connect deeply with its customers, offering them not just products, but a lifestyle that is focused on health and mindfulness.
Lululemon is set to launch its Black Friday promotion on 23 November. Customers interested in accessing deals early can download the Lululemon App and create an account for exclusive early access.
The increased sales and customer traffic during these Black Friday events could potentially boost these stocks performance. The heightened shopping activity, driven by significant discounts and exclusive deals, not only enhances immediate revenue but also bolsters the company’s market position, which can positively influence investor confidence and the stock’s overall value.
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- “2023 Holiday to Reach Record Spending Levels – NRF”. https://nrf.com/media-center/press-releases/2023-holiday-reach-record-spending-levels. Accessed 22 Nov 2023.