Welcome to a Black Friday like we’ve never seen before. 

Retailers such as Walmart Inc. (NYSE:WMT), Target Inc. (NYSE:TGT), and Best Buy (NYSE:BBY) that knocked sales out of the park this year are in the spotlight today, and many analysts expect them to do quite well despite all the state shutdowns. The National Retail Federation (NRF) pegs overall holiday sales gains of 3.6% to 5.2%—a wide swing by most assessments that underscores the level of uncertainty on consumer spending this year. The International Council of Shopping Centers has a tighter, lower forecast of a 1.9% gain in sales.

Friday’s session wraps up at 1 p.m. ET, three hours earlier than normal. Don’t be surprised if trading is thin and choppy, because many investors and traders probably took the day off. Check for media reports throughout the day on how Black Friday is going, but it won’t necessarily be like in the past with reporters following customers around big-box stores. It might be a bit harder to get a feel for how things are going. 

E-commerce sales could knock the ball out of the park, though. An Accenture survey found 75% of consumers plan to head to their favorite easy chair or the kitchen counter to shop online for holiday gifts this year. That’s up from 65% who said so last year.

Wednesday’s session wasn’t much to write home about, though it’s worth noting that some of the “stay at home” stocks in the Tech sector, including semiconductors, got a boost after playing second fiddle to Financials, Energy, and Industrials earlier in the week. One big Tech winner was Slack Technologies (NYSE:WORK), whose shares jumped about 37% after The Wall Street Journal reported that the workplace messaging platform is in acquisition talks with Salesforce.com, Inc. (NYSE:CRM). 

The Dow Jones Industrial Average ($DJI) couldn’t keep its head above 30,000  Wednesday after getting there for the first time on Tuesday, but that stands to reason. You often see consolidation after a big milestone is hit. Anyway, the $DJI isn’t the market. It’s only 30 stocks. While it’s come a long way since the pandemic lows, it hasn’t done as well as the S&P 500 Index (SPX), or Nasdaq (COMP), for that matter. 

Also, the Russell 2000 Index (RUT) of small caps has been outrunning almost everyone else the last month or two, though it took a breather Wednesday. Don’t discount the impact of a thriving housing sector on the RUT. When housing is strong, it can increase business for the regional banks that make up a good chunk of that index.

While the major indices gallop, the dollar continues to edge lower. The U. S. Dollar Index ($DXY)—which measures the greenback vs. a basket of other currencies—slipped below 92 on Wednesday for the first time since early September. Wednesday’s dollar weakness came after weekly initial jobless claims ticked above Wall Street’s expectations for the second time in a row. A flagging dollar can sometimes be helpful for equity bulls and might signal growing enthusiasm about overseas economies returning to life next year, but also speaks to concerns about U.S. economic softness. Some analysts now expect U.S. growth to go negative in Q1. 

Those lower Q1 estimates are despite the Atlanta Fed’s GDP Now meter predicting 11% seasonally-adjusted annual growth for Q4. That’s up from its previous estimate of 5.6%. We’re still a long way from getting Q1 estimates from the Fed, but investors can expect some longer-term growth outlooks, perhaps, at the Fed’s mid-December meeting.

More Than Payrolls: Week Ahead Includes OPEC, Manufacturing Data

That’s well in the future, so let’s look at what faces investors next week. Nothing stands out as much as next Friday’s monthly payrolls report, and more eyes are focused on it after these last two weeks of rising jobless claims that suggest the recovery has slowed. October saw 638,000 new jobs created, but the headline figure is down several months in a row, and some analysts are even wondering if eventually it could go negative. 

Other key reports next week include Chicago PMI and monthly ISM manufacturing. The ISM could be interesting, considering how strong it was in October. Any sign of a pullback might raise concerns that lack of government stimulus and rising virus cases have started a negative blowback. Weakness there might get reflected in some of the same cyclical sectors that helped lead the recent rally. We’re talking Industrials, Materials, and Energy.

We’re still awaiting some virus data from other companies, and of course any action from the U.S. Food and Drug Administration (FDA). Regulators there plan to take about three weeks to review Pfizer’s (PFE) vaccine before an outside panel of experts meets to review the application the second week of December. That meeting has been scheduled for Dec. 10, The New York Times reported this week.

Good Trading,
JJ
@TDAJJKinahan

TD Ameritrade® commentary for educational purposes only. Member SIPC.