Consumerism: Black Friday, Small Business Saturday, Cyber Monday, & Giving Tuesday

The markets sold off on Black Friday, not because of a lack of consumer excitement for the holiday season, but due to news around the trade-deal — President Trump signed legislation supporting the pro-democracy efforts in Hong Kong, and a Reuters article on possible actions to bring further sanctions on Chinese equipment maker Huawei. We expect these “unfavorable” news items to fade quickly from memory as investors focus on this weekend’s release of healthy Chinese economic data, in addition to a New York Times article concerning China’s aggressive efforts to curb the sale of fentanyl. This has been one of Trump’s key demands in the trade talks. On the other trade front, the Washington Post has reported that Nancy Pelosi and U.S. Trade Representative Robert Lighthizer could soon announce a compromise to move the USMCA (NAFTA’s replacement) to a vote. It is widely expected that the USMCA will pass along bipartisan lines as soon as Pelosi brings it to the floor. A Santa Clause rally is fully possible this year; a welcome change from December a year ago.

The U.S. consumer jumped right into the spending holiday. According to Adobe Analytics estimates, online sales on Thanksgiving Day topped $4.2 billion, an increase of 14% over last year. Black Friday on-line sales reached $7.4 billion, rising more than 19%. “Buy now with 1-Click” continues to dent traditional retail. Numbers from ShopperTrak showed that visits to stores fell a combined 3% during Thanksgiving and Black Friday compared with the same days in 2018, while preliminary data from analytics firm RetailNext showed net sales at brick-and-mortar stores on Black Friday fell 1.6%.

In aggregate, the National Retail Federation forecasts U.S. holiday sales of approximately $730 billion, up 4% from 2018. Over the past five year, holiday sales have risen at an average rate of 3.7%.

Cyber Monday is increasingly popular. Shoppers spent $7.9 billion on Cyber Monday 2018, up from $6.6 billion in 2017. According to estimates from Adobe Analytics, Cyber Monday ecommerce sales will surpass $9 billion today1.

Actual and Predicted Online Revenue by Key Dates

Business Insider reports that small businesses sell half the products purchased on Amazon and made $160 billion in sales last year.

Source: Adobe Analytics

Last week, Gabriel Zucman tweeted out the following table with data sourced from Forbes. Zucman is a professor of economics and public policy at the University of California, Berkeley. He is also the author of a book on America’s “runaway inequality,” titled, The Triumph of Injustice and a proponent of the wealth tax. It implies America’s richest citizens give away the equivalent of only $3,000 per million dollars of wealth. The average American is much more charitable, on a relative basis. We suspect this data does not fully capture the true charity of America’s wealthy. For example, on Giving Tuesday 2015, Mark Zuckerberg and his wife Priscilla Chan announced their intention to donate 99%+ of Zuckerberg’s wealth from his Facebook shares through their newly formed Chan Zuckerberg Initiative.

Source: https://twitter.com/gabriel_zucman/status/1198422794607845377

The Week Ahead:

In the post-thanksgiving week, the calendar will be busy with a slew of macroeconomic data points. On Monday, we will see Manufacturing Purchasing Manager’s Index (PMI), with the non-manufacturing/services PMI released on Wednesday. The week will close out with the November Jobs Report and the University of Michigan Consumer Sentiment Index on Friday.

1 https://www.adobe.com/content/dam/www/us/en/experience-cloud/digital-insights/pdfs/adobe_analytics-holiday-predictions-2019.pdf?promoid=NV3KR4X2&mv=other