Black Friday marks the beginning of the festive season and is a constant element in the stock market’s year-end performance forecasts. Recent years reveal a market growth trend during this period, particularly in several leading sectors, such as electronics. This increase is driven by retail sales, which may, however, be limited this year. Consumer debt and geopolitical unrest could curb it, resulting in weaker growth or even a quarterly declines. Analysts from Freedom24 have examined the factors that will affect the markets during Black Friday.
US market statistics clearly present a steady, annual increase in retail sales during the pre-holiday and holiday periods. From 2015, when it reached $582 billion, it grew to $923 billion in 2023. For 2024, further growth to $960 billion is projected. Looking more broadly, since 1990, the S&P 500 recorded an average increase in the week after Black Friday of 0.63%, compared to 0.17% for other weeks of the year. Thus, it’s clear that the shopping frenzy associated with the holiday of consumerism usually generates significant profits, at least in the US.
The boom during Black Friday and Black Week is crucial as it can determine the tone of the entire quarter. If sales are disappointing, a weaker period on the stock exchange is expected. Currently, many factors indicate positive prospects, yet there are also risk factors. It’s worthwhile to examine general trends, those from the US markets, which always strongly influence global ones, and compare them to local conditions. Will Black Friday guarantee a year-end rally?
Who Will Profit from Black Friday
Among the market entities regularly benefiting from the holiday of consumerism, we find giants like Nike, HP, and Apple. Electronics consistently lead in Black Friday sales, offering significant discounts on high-demand products, such as smartphones, laptops, TVs, and home appliances. In 2023, the electronics and home appliance sector recorded an impressive 9.3% increase in sales during the festive season.
The clothing industry also records notable gains. Although the growth is smaller than with electronics – it was 3% in 2023, it’s quite assured as consumers look for discounts on winter clothing and footwear. The fashion industry is driven by another noteworthy sector – e-commerce. In the US, this sector recorded sales of $9.8 billion on Black Friday in 2023, an increase of 7.5% year on year. During the entire festive period, when e-commerce sales reached over $276 billion in the United States, the increase was even larger, reaching 8.2%.
This sector also has one essential feature: it can enhance the profits of other industries, which often benefit from Black Friday and Black Week. Besides those mentioned above, they include the cosmetics sector, home appliances, toys, as well as food and drink. In some cases, this dependence is vital for understanding the market. For instance, fashion brands with advanced e-commerce operations have an advantage over competitors because it’s forecast that they will have a larger share of festive spending.
Inflation, Debt, Spending – the Most Important Variables
Enthusiasm for online shopping is widespread, and it’s forecast that this sector will rise again – this time by 7-9%, with online sales exceeding $290 billion over the entire festive period in the US. The e-commerce growth is not the only trend, which continued from 2023. Of course, the interest in Black Friday remains unchanged. In US markets, and in many worldwide, this day attracts millions of consumers to stores. They will seek products with the best value for money – here appears another constant trend of better positioning of companies that offer the best deals.
Besides the constants, there are also changing market trends, which no longer look optimistic. Although, from last year, inflation fell, which theoretically increases purchasing power, the high level of consumer debt cannot be forgotten. Worrying is the credit card debt – 25% higher than before the pandemic. Rising debt leads to greater caution in shopping and could curb spending.
The conservative approach towards Black Friday’s growth to some extent is influenced by forecasts for it. Compared to 2023, when sales during the holiday period grew by 3.8%, 2024 is expected to be weaker – it’s forecast to increase by 2.5-3.5%. This moderate growth isn’t alarming but points towards a trend of greater caution during this year’s shopping.
In contrast, one can mention data on the global growth of the retail sector: from $26.4 trillion in 2021 to $31.1 trillion in 2024. This may argue for optimism, as does the 0.5% increase in personal spending in the US from month to month in September of the current year. The Polish market looks a bit more pessimistic, where in the same period retail sales decreased by 5.7%, and year on year – 3%, as reported by GUS (Central Statistical Office).
Discussing the domestic economic landscape, it’s worth discussing another issue, namely geopolitical tensions. They affect all global markets, but, understandably, in Poland, they may be stronger. They are associated with potential supply chain disruptions and a drop in consumer optimism, which together could negatively impact sales on Black Friday and during the following festive period.
In conclusion, Black Friday and Black Week usually cause short-term profits in retail stocks and positively affect broader market results. However, there are also potential negative effects related to consumer behaviors and economic results. It’s worth carefully monitoring sales data because they provide valuable insight into future market trends and can guide investment strategies for the year-end and the coming months. Maintaining a diversified portfolio remains key, especially considering the potential volatility associated with these trading events.
Source: https://managerplus.pl/black-friday-2024-czy-swiateczny-szal-zakupowy-ponownie-napedzi-rynki-gieldowe-61212
