Marketers look for clues on consumers as holiday shopping begins | So Good News

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NEW YORK – Investors are keeping a close eye on US retail sales as a barometer of consumer confidence as inflation bites, as the most important shopping season of the year begins on Friday.

Consumer discretionary stocks, as measured by the S&P 500 Consumer Discretionary sector – a group of companies that benefit from spending on shopping, restaurants, and vacations – were flat in morning trading on Friday.

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The sector is down 32% year-to-date, more than double the 15.5% decline in the S&P 500, as consumers have been buffeted by rising inflation and the fastest rate hikes since the 1970s.

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“These stocks are an indicator of how the economy is slowing down and whether low inflation is boosting confidence on Main Street,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

Expedia Group Inc, Ralph Lauren Corp and Home Depot Inc lifted the share on Friday, each gaining more than 1.6% compared to a 0.1% gain in the benchmark S&P 500.

Consumers spent $5.29 billion online on Thanksgiving Day, according to Adobe Analytics data, up 2.9% from a year ago, led by big discounts in categories such as toys and electronics.

The lowest sales on Friday were toys, which saw a 34% discount on furniture, electronics, and computers.

U.S. consumer prices rose more slowly than economists expected in October, bringing annual growth below 8% for the first time in eight months and helping to kick off a rally in the U.S. stock market on the belief that inflation is on the way. at the peak of approaching 40. – many years.

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Overall, the National Retail Federation, a trade group, predicts that holiday sales, including e-commerce, will rise between 6% and 8% to between $942.6 billion and $960.4 billion in November and December. This would come in below the 13.5% jump reported last year, and a 9.3% gain in 2020.

Retailers, too, started offering early discounts earlier this year to attract buyers.

Target Corp, Kohls Corp, and Amazon.com Inc ran what’s known as Early Friday — the term for the day after the Thanksgiving holiday — that discounted toys and other goods by up to 50 percent.

Those companies did not immediately respond to requests for comment.

But even with low discounts, shoppers will still spend more on popular items like the PJ Masks toy car or Mattel Inc’s Mega Hauler semi-truck because prices have risen faster than promotions, according to data provided by DataWeave.

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Mattel did not respond to a request for comment.

The attempt to woo consumers comes as the closely watched University of Michigan survey was revised Wednesday to 56.8 from 54.7, above expectations of 55.0 but below the 59.9 reading from October. Expectations to buy long-term manufactured goods fell by 21% due to higher interest rates and higher prices, the survey found.

“Information has been waning as consumers try to balance strong economic and labor market conditions against expectations of a recession and sluggish growth,” said Thomas Simons, chief economist at Jefferies LLC.

Retailers have struggled to adapt their products as consumers struggle to cope with the coronavirus pandemic, leaving some companies out of stock.

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Walmart Inc, for example, raised its annual sales and profit forecasts as demand for food is expected to continue despite higher prices. In fact, it predicts a sudden drop in sales for the holiday quarter.

Walmart shares are up 7.5% for the month to date, while Target shares are down 1.2%. Walmart shares fell 0.2% on Friday, while Target shares fell 0.7%.

Department store Macy’s Inc. raised its annual record last week. The company’s shares rose nearly 12% on the month. Kohl’s, meanwhile, dropped its forecast amid weak demand due to rising prices. The company’s shares are up 6.7% for the month to date.

Walmart, Macy’s and Kohl’s did not immediately respond to a request for comment.

(Reporting by David Randall Editing by Nick Zieminski and Anna Driver)