Fa la la la la Thursday

Only 4 more shopping days until Christmas.

The S&P fell 80 points on strong volume (102M on SPY) after rising 2 points on Tuesday on weak volume (55M on SPY) and that’s exactly what I was talking about yesterday as we clearly have very weak foundations to this rally – which are easily torn down.  

Not to worry though as, this morning, on no volume whatsoever, the S&P has already bounced back 25 points (strong bounce) as the Dollar has been smacked back half a point, back to Tuesday’s lows. Manipulating the Dollar is the best way to manipulate the markets as they instantly reprice to the Dollar and it’s far, far cheaper to push the Dollar around than the S&P and, if you can do it enough to change sentiment or trigger a short-term TA signal, the beautiful sheeple will take care of the rest.  

Speaking of shopping, the 2023 holiday season is painting a unique picture of consumer behavior and retail trends. eMarketer’s forecast suggests a robust increase in overall retail spending by 4.5% to a staggering $1.3Tn, with Ecommerce playing a pivotal role. Nearly 20% of sales are expected to come from online platforms, contributing to almost half of the incremental spending gains. This shift towards digital shopping is a clear indicator of changing consumer preferences and the growing importance of a strong online presence for Retailers. 

The Experian 2023 Holiday spending trends and insights report reveals that a majority of consumers, about 62%, plan to maintain or increase their spending levels compared to last year, averaging around $1,000 per household. They are also showing a significant tilt towards online shopping, with 54% of consumers preferring this mode despite the “end” of the pandemic. The rapid rise of Buy Now Pay Later (BNPL) options is noteworthy, as they are now preferred by 46% of global consumers, overshadowing traditional credit card usage. This trend underscores a shift in consumer credit preferences and the growing appeal of flexible payment options as consumers run out of ready credit – this can have very negative repercussions down the road, however.

According to McKinsey’s Consumer Pulse Survey, there’s a notable change in the timing of holiday shopping. While a significant portion began in October or earlier, 40% of consumers started their shopping in November, up from 35% in 2022. This shift might reflect a more strategic approach to deal hunting or a response to economic pressures. The survey also emphasizes the consumer’s quest for convenience, value, and safety, suggesting that retailers need to enhance their supply chain and omnichannel capabilities to meet these expectations.

The U.S. Census Bureau’s data offers a retrospective view, with December 2022 seeing $17.3Bn in retail sales for department stores versus a record $121.3Bn for electronic shopping and mail-order houses. This historical context sets the stage for understanding the current season’s trends and potential outcomes. 

$3.17 billion

The value of U.S. imports of Christmas decorations from China for 2022. China led the way with 89.8% of the U.S. total imports of Christmas decorations.  

$32.7 billion

The fourth quarter 2022 seasonally adjusted after-tax profits for U.S. retail trade corporations with assets of $50 million and over, up $10.5 billion from the $22.2 billion recorded in the third quarter of 2022. 

$1.09 billion

The value of U.S. imports of tapered candles in 2022. Most of these came from Vietnam, representing more than 49.5% of America’s imported tapered candles, followed by Canada with 16.2%.  

In summary, the 2023 holiday shopping season is characterized by a significant uptick in overall spending, a pronounced shift towards online shopping and flexible payment options, and evolving consumer habits in terms of timing and preferences. These trends not only reflect the current economic landscape but also hint at the evolving dynamics of consumer behavior and retail strategy.