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US investors wait on results of Black Friday sales

Investors will get a glimpse of US consumer health this week as the holiday shopping season gets under way with Black Friday sales.Wall Street has been struggling with uncertainty over US congressional midterm elections, the path of interest rate increases by the Federal Reserve, tariffs, the trade war and the possibility corporate earnings have already peaked. But a strong start to the gift buying season could help ease some concerns.After an October that saw the S&P 500 slump nearly 7 percent, Wall Street has struggled to find its footing, rising 0.7 percent so far in November. About 38 percent of American consumers plan to shop on Black Friday this year, and six in 10 of those shoppers anticipate making at least half of their holiday purchases on that day, according to a poll.“Of all the other factors, the consumer has been hanging in there — they drove third quarter growth, we are seeing wage growth over 3 percent, financing rates are still reasonable,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.“If we see any kind of disappointment in Black Friday sales, that is going to cause some real concern.”Same store sales for the fourth quarter are expected to come in at a healthy 3 percent, according to Refinitiv data. Still, that number is trending downward from the previous two quarters and is below the year-ago result of 3.1 percent.“Even a healthy consumer doesn’t necessarily mean that retail sales and profitability and performance will be off the charts,” said Shawn Kravetz, president of Esplanade Capital in Boston.Also a strong start to holiday shopping will only partially alleviate investor concerns, with a G20 meeting at the end of November and the final Fed policy announcement of the year in December likely to cause some market volatility.The market will need to digest these events for it to have a chance for what is known as a Santa Claus rally. Since 1950, the S&P has rallied in December three-fourths of the time.
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