I’m back on dry land after a wonderful, extended Thanksgiving weekend cruise with three generations of the Larson family celebrating together. I’m happy to say everyone had a good time, turkey and stuffing were part of the menu even at sea, and the weather cooperated nicely.
Market Roundup
Another side benefit: No madcap mall crowds to do battle with on Black Friday! The shops on board offered their own special deals. But I didn’t have to wake up at 4 a.m. to get them, or park halfway to Siberia.
That said, what kinds of early reports are we getting about sales volume and profit prospects? And what do they say about the retail industry’s home stretch?
Well, Black Friday in the bricks-and-mortar world may not have been all that retailers hoped it would be. The research firm ShopperTrak said sales that day dropped by more than 10% to $10.4 billion from $11.6 billion a year earlier. A separate analyst quoted by CNBC deemed sales “perfectly average.”
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| Less crowded than Black Friday, and more relaxing. |
The shift toward online sales appeared to continue, however. The National Retail Federation estimated that 103 million people went online to shop over the Thanksgiving weekend, compared with only 102 million at strip malls and shopping centers.
So what about Cyber Monday? Research firm comScore estimated in advance that online retailers would generate more than $3 billion in sales. The software company Adobe said late Monday that the advance estimate looked pretty accurate, with sales in that general range. That would represent a 12% rise from a year ago.
All in all, it hasn’t been an easy year for the retail industry. Major retailers like Wal-Mart, Macy’s (M) and Nordstrom (JWN) have struggled, as have a number of specialty retailers in the apparel, jewelry, and accessories businesses.
All of those stocks have struggled as a result, even as shares of Amazon.com more than doubled from this time last year. We’ll have to see full-season sales come in strong for both bricks-and-mortar AND online retailers if the retail sector overall is going to start contributing to market momentum, rather than subtracting from it.
| “All in all, it hasn’t been an easy year for the retail industry.” |
So what’s your take? Is your personal spending up by a substantial margin overall? Or are you spending the same amount, with just a larger percentage shifting to the online world from the offline? What do these figures say about retail stocks and the overall stock market? Let me hear about it on this web page.
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Vacations offer a nice way to recharge. But I’m glad to be back in the saddle again, ready to hit it hard in this last month of 2015 and beyond! You weighed in on several issues in my absence, including the one I wrote about today — retail sales.
Reader Troy said: “I personally pumped more than $1,000 into the U.S. economy yesterday. As usual, Amazon.com (AMZN) was well-prepared for the traffic and offered some irresistible deals. In fact, I only encountered one website that was not equipped to handle the online traffic and I did not place an order.
“In this shift from bricks-and-mortar to online, a business MUST be able to handle the increased traffic of sales. I believe we are looking at an inevitable shift in sales from local to online.”
Reader Chuck B. shared some thoughts about China’s yuan currency being added to the International Monetary Fund’s “Special Drawing Rights” basket. The SDR hasn’t been modified since the euro was added in 1999, and the new weightings will take effect in October 2016. He said:
“It will make up about 10%, with the dollar at about 40%, and the euro about a third. The yen and pound will each be around 8%. The delay is to allow national organizations, etc., to redraw their investments to include Chinese bonds and such, without a sudden effect from making those investments.
“Nevertheless, the effect on markets in China could be astounding, and everyone should consider adding some carefully chosen Chinese stocks, ETFs, etc., to their own portfolios.”
He cited ASHR and FXI as ETFs that could benefit — to which Reader Mr. C. said: “You are so on the money. The Chinese are coming, and the world will ride the Dragon and leave the Eagle in the dust.”
Finally, Reader Ken weighed in about the ongoing conflicts in Syria, Iraq, and elsewhere in that part of the world. His take:
“I wonder what our world would be like if we didn’t always have to be on the warpath. If we were not such a huge presence in the Middle East, would ISIS even exist?
“The problem I see with warfare is that those who actually fight the wars have nothing to gain from them. The possible gain from war is for those who rule the countries and those who manufacture the materials for war.
“We need to make a giant step in evolution and stop attacking those who are different from us. Adopt a more live and let live attitude. I realize that at present, we cannot allow those maniacs to inflict their pain upon the world. But I do believe that if we could adopt a more intelligent approach, we might be able to solve the problem with less bloodshed.”
Thanks for sharing. I’ll be very interested to see if the holiday shopping figures do ultimately confirm that sales rose robustly this year … or if online just cannibalized bricks-and-mortar, with overall sales lackluster.
My colleague Larry Edelson will have more about the IMF news and the prospects for China soon, so stay tuned on that front. And as for the Middle East, it seems like nothing can end the cycles of war there. When we get deeply involved, vicious fighting ensues. When we pull out, fighting continues to rage anyway.
I’d love to be more optimistic. But with competing religious, territorial, economic, and geopolitical claims throughout the region, an end to conflict doesn’t seem likely in the near- or long-term to me. As always, feel free to add your voice to the mix below though.
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Why aren’t companies spending on anything (besides their own shares and M&A, that is)? That’s what the Wall Street Journal attempted to answer in this story. It points out how business spending on capital equipment, new facilities, and other forms of investment is running at consistently weak rates, holding back the economic expansion.
More U.S. Special Forces troops could soon be headed to Syria to press the fight against ISIS. A few dozen commandos are already working with rebel forces, and more could join the current ongoing campaign of drone and airplane strikes.
The Puerto Rican debt crisis continues to simmer, with $355 million in payments that the government can’t really afford due today. The island is struggling under the weight of $72 billion in debt, lackluster tax income, and a weak economy. Moreover, it hasn’t gotten anywhere with its efforts to get approval in Washington to use the bankruptcy court as a way to re-negotiate its debt at more favorable terms.
How did the team of terrorists pull off their deadly strike in Paris two weeks ago? This New York Times story offers a chilling account of the planning process and the way things ultimately unfolded that fateful night.
Will capital spending ever come back, and if so, will that help bolster the economic recovery? What will adding more U.S. “boots on the ground” in Syria do for the fight against ISIS? Is Europe still vulnerable to more Paris-style attacks? Let me know your thoughts below.
Until next time,
Mike Larson
P.S. Larry Edelson’s VITAL new report, “SUPERCYCLE 2015: Surviving ISIS, the Fall of Europe and the Death of Western-Styled Socialism,” could prove to be the most PROFITABLE report you read all year.
Hurry, click this link to read it now! It could make you very, very rich.
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
{ 38 comments }
Real Estate seem to be in bubble; low-interest rate are keeping prices high! When interest rate rises, there is good chance for real estate to fall over 20%.
or the opposite could happen as buyers try and lock-in lower rates before they’re gone forever. what’s hurting real estate right now is low inventory.
cars are selling like crazy. people are driving everywhere now because of the low oil prices. families are also stopping to eat, shop and even take vacations. mike larson is a good example. all this increased activity will translate into an improving economy.
If the Washington politicians won’t let Puerto Rico go to bankruptcy, either the debts will need to be repudiated, which could have untold effects on both P.R. and the U.S., or they will add that debt to the almost $17 Trillion we taxpayers already owe. Eventually that debt must be repudiated, anyway, since it can never rationally be repaid. P.R.’s debt might even be the trigger to that repudiation, which might even destroy the economies of every nation in the world, since we owe just about everyone.
Almost $ 19 Trillion…check it out!
we’ve turned a corner. the long and winding road ahead will see gradually increasing interest rates (bad juju for gold), and gradually strengthening dollar for the next few decades. this is the beginning. the starting point.
$1000 gold
“gradually strengthening dollar for the next few decades”
Love to hear your thoughts. How do you see the high debt levels being repaid
many large economies have successfully inflated their way out of debt. it’s just a part of the economic cycle. you and i did it when we bought our expensive home decades ago. we went from a huge debt to a minor expense through the power of inflation. btw, the deficit is under control and we’ll soon be running at a surplus, a feat the experts also said was impossible just a few years ago.
If I wanted to know what all of your friends said, I would have asked my friends and not felt so stupid. If you have something to say besides your bio, how about saying it.
Exclude me out of your future come-on reports. I’ll just call a friend.
Glad you had a restful sea voyage. Certainly takes your mind off of your work.
Sam
I suppose, sam, you never take time off, nor talk about it afterward to all your friends and any strangers who might be interested… or not. Actually, I hope the trip might have freshened Mike’s mind about the issues we face. And if you’ve got it, why not flaunt it a bit. I think we all want to have that opportunity ourselves, and hope Mike can help us get there.
BUYBACKS ARE TO BENEFIT THE CEOs, THEY ARE AWAY OF PROVIDING INSTANT LIQUIDITY TO CEOs WHO THEN GET NEW OPTIONS.
Retail sales! I have to admit,I am dedicated to Amazon. Besos has made it so easy to shop. Number one is service.Amazon tops the list .Second,I received an email from Amazon stating that they had calculated my import duty wrong and they will be depositing a refund back into my account. Who does this? I would have never missed the $4.94. I could go on but you get my meaning.
Ebay is better and easier to order from than Amazon. Not sure why they are not up with them. Cheaper in most cases too…
i agree. gave up on amazon a long time ago.
ebay is the way to go.
Good artlcle, and it’s nice to have you back.
As I read your post my eyes drifted to the right, and I couldn’t help but notice that the 10 year note is now yielding 11 less basis points. This prompted me to wonder why these instruments have been oscillating so much over the last few months. This quickly morphed into the thought that I now believe the Fed has completely lost control of interest rates. As these thoughts continued to churn in my mind a lot of less than happy images/thoughts came popping out regarding where all of this might be going. So, here’s my first cogent thought; the Fed actually has lost control, which is not that big a deal since I’ve seen this before, but this time it appears to be created completely out of political pressure from the White House. Second thought: The Fed missed the window to raise rates by almost 4 years, and raising them now will accomplish nothing, and likely show that the Fed is completely out of ammo. Third thought; why would Janet Yellen ever take that job? Bernanke, Geithner, and obama have turned the head of the Fed position into Dante’s third level of hell from what I can see. Last thought: deflation will come before inflation, the fed will lean in the wrong direction in their attempts to fix it, which will lead to insane levels of inflation within a few short years. A Question: given all of this, why on God’s good earth would anyone want to be president beginning January 2017? If it’s ego, then that level of ego is clearly well within the range of insanity.
“why… would anyone want to be president beginning January 2017?” A very good question, and the answer seems to be that NO one with any sense wants the job. Which is why we have the bunch of Nudniks that we have running for the office. There is not one of them I’d seriously consider voting for, but those are the choices we will apparently have. God help this country. If He exists, He must have it in for us.
One party will give you more of the same and the other is struggling to understand the solutions to the problems we have. When it all blows up many will stand around like they never saw it coming. Acquire hard assets and liquidity while it is worth something.
Our political system is merely being exposed for what it actually is. A farce. Jim
Thanks for supporting your local retailer who his/her doing their best to stock products for
their neighbours while giving you a good selection that you can actually touch and feel instead of looking at pictures and shopping with your fingers and waiting for delivery, while hoping the product is what you ordered
Have a very merry Christmas
Thank you! I am just getting started, and very excited, too. Glad you had a lovely
Thanksgiving. So did I. Ruth
Watch your language Hummel. U R in a public site. U don’t have any sense either. Get yo mama to teach U some manners. Hulio
First off, Hummel has every right to question Mike’s style of saying very little, and asking for everyone’s opinions. Personally, I wouldn’t want to use Mike’s daily musings as investment advice. If you want that from Mike, you have to pay. But I do like reading what everyone has to say, even though there are only about a half dozen regular contributors. But I’ve stopped reading Hoppman’s stuff because he doesn’t publish the comments ( but Mike does).
SAM, don’t talk to Mr. Larson that way. He knows all about $$ and so on. Why don’t U go back to your home in Yakatzon.
Is that where you’re from Hulio, Yakatzon?
It remains to be seen how the holiday shopping has and will go. Apparently, on-line shopping did very well in the black days, while in-store business suffered at least a bit. There are still several weeks of December to go, though, and this will either make up the difference, or not. My guess would be that not as much business as hoped for will be done in that time, and the totals will be somewhat disappointing – especially to the large retailers. There may be some good sales in January. Amazon, and a few other on-liners will do well though, maybe showing significant gains.
Business Roundtable Chairman, Randall Stephenson, CEO of AT&T, says things look “alarming” for business. Capital spending is down 6.6 points, to 67.5, the lowest in three years. Some 27% of CEOs plan cuts in capital spending and hiring, up from 20% in the previous quarter, so there seems no chance of improvement in the near future. The fact that they plan cuts in hiring seems particularly alarming, and would undercut one of the Fed’s key criteria for hiking interest rates any time soon, though they may have talked themselves into it. If so, they will certainly have the opportunity to regret it, if it makes things turn worse.
I’m with you Chuck. I would like for M$AU to be right, everyone would. This “recovery”is like nothing we have ever seen. Two per cent growth, 94 million not working, serious healthcare disruptions, and contracting manufacturing don’t point to a great economy dead ahead, and this after six years of zero interest rates. No one seems to want to account for the massive debts, public and private, accumulated over the last ten years. Rising interest rates don’t bode well for debt service. Many key companies, like Deere, are announcing layoffs and giving earnings warnings. Our big trading partners, Europe and Japan, are basket cases. We are slipping into another unwanted war with the wrong people in charge. They are worried about climate change. I do not see smooth sailing ahead. Jim
From the hotel I was at last week, the climate changed four times in the one day, but there wasn’t any global warming. This subject has become the latest religion where our beloved politicians don’t seem to care about the average persons power bills. When they do finally refocus on middle class jobs, wealth and our countries prospects and take their collective finger out of it, maybe we can get this country moving again.
I apologize for beating around the bush. Our problem is a strategic one. When you have an economic expansion (boom) a lot of malinvestment and debt is accumulated. Then you have a bust to purge the system so it can recover and take off again. We should have crashed in 2008. We didn’t. We doubled down instead with more debt. We cannot recover until we crash and the debt is wiped out. We used to have mini crashes called panics. To prevent this The Federal Reserve was created. They stopped the little busts but instead gave us whoppers like the thirties and the seventies. As much as the Keynesians would like us to believe the law of economics has been repealed by their brilliant selves, it has not. Larry is right. We will crash. Jim
Thanksgiving night and friday was very rainy for most of the country so not sure how much that may have impacted brick and mortar stores. May have to wait until the whole shopping season is over to compare year to year.
On line shopping will continue to be a growth industry that traditional ‘bricks and mortar’ will not recover from. B&M have rents and wages that will continue to impact on their sales and margins and finally jobs and landlords. These are the issues we need our redundant politians to focus on, not the increase in methane gasses around the planet. There’s far too much methane gas coming out of Washington as it is.
Spoken like a truly self-centered conservative; just give me mine now, and don’t think about future generations. Well pollution is so bad in “cheap coal-powered” China, that they’re being forced into renewable energy. And for the few hundred million who live along the world’s coastlines, global warming will put them under water by the end of this century. And that’s not to mention increased storm and drought intensities between now and then. Whether or not you understand the science, greenhouse gas (mainly carbon dioxide) is behind this problem, and burning carbon-based fuels produces it. So yes, online retail will cause displacements in brick and mortar retail, but the role of the government is not to manage that problem, but rather the greater societal problems like global warming.
spoken like a truly self centered liberal left wing progressive democrat Phil
Oh dear Phil
You sound like a decent man but no, the government is of the people, by the people and for the people, not global warming. Global warming is not a societal problem. It is an issue of debate certainly but there are major economic problems that our country is not addressing.
Comment on Ken’s comment for 12/02/15: Though I might agree with Ken’s original statement that had it not been for us being there on the warpath in the Middle-East ISIS would not exist. That has to assume many other possibilities. All of which involves the American soldiers chasing the Islamist terrorist all around the world to kill them on a one on one basis. It also assumes that their hatred of us would not still have led us to some other scenario of us being on the warpath in the region. One would have to assume that this Utopian view to have done nothing “warpathish†would have led to a more Utopian World. Had we not been there the same despots would be in power today. Possibly holding fragile politics and economies together. However the same training camps would still be turning out hateful terrorist of their killing machine. Granted that may have been better for the region. But it certainly would not have not have been better for America. Could we have turned them around philosophically or politically and got them on our side without going on the warpath? Talk, talk, talk billions of dollars in foreign aid to appease their hatred of us while they harbored the training camps and murdered their own people. Absolutely not! It’s the historical religious views of the region that will cancel any and every effort to change the future of the region or the world for that matter. I’ll be the last to say that I know how they believe or why they believe what they do. But I do know that no amount of political or economic coercion will stimulate the whole of the region to stop warring between themselves. CONQUEST of the mind and controlling personal actions is the only victory they will accept. They are not interested in any other way of life but the deep seated historical poverty that has been the mainstay of their people for thousands of years. That, they can control. People too poor to move or protect themselves is what the war lords of the region have sought to control and expand on. They are not interested in anything that complicates the simplicity of controlling ignorance and poverty. The global dominance of their philosophy and way of life is what they are “warpathing†over. Kill them or they kill us.
“Boots on the ground.”
There is no doubt that the fanatical ISIS movement is a true problem for the security and freedom that we enjoy in the USA, and the rest of the world, for that matter. The ISIS Islamic State deserves to be defeated and exterminated. Realistically, the Islamic State’s Muslim neighbors should solve this problem; however, we know that significant numbers of American troops will likely be required to accomplish this deserved extermination.
I am a little gun-shy about sending troops into a Muslim religious conflict, especially after the Iraq mistake of a trumped up war by Bush 43 and Dick Cheney that cost our nation over 4400 lives and trillions of dollars from our precious treasury, as well as world respect and leadership. However, it is obvious that the ISIS treachery is real and promises to disrupt the world much like fascism grew in Europe during the 1930’s.
Now, with that said, I have some definite common sense recommendations about what the “ground rules” should be for putting “boots on the ground” in the Middle East.
First, and foremost, would be that POTUS and Congress would jointly declare an official War with a commitment to lead a Global Coalition to defeat ISIS. And, that this joint declaration would include legislation that will support the following common sense actions to help win the War in a relatively short period of time:
–Activate the Selective Service Act authorizing the compulsory enlistment of eligible people to serve in our military to increase the strength of the Armed Forces of the United States to defeat ISIS.
–Activate all National Guard units to help support and uphold our global commitments to the Middle East War effort.
–Reactivate all military retirees under age 50 to serve and support the War effort. Their experience is priceless.
–Initiate a “War Tax” on individual’s income that is sufficient to cover the expenses of the War. This additional income tax must be “dedicated to the War effort only” and would cease upon declared victory in the War.
–Apprehend and seize all the Corporate funds that are parked overseas to dodge U.S. taxes. Those returned funds should be taxed at corporate rates and those taxes dedicated “to the War effort only.” The balance after taxes returned to the corporations.
–Regulate and control profit margins on industries and private contractors that attempt profiteering from the military War effort. Greed from the war should not be rewarded and violators should be prosecuted.
–Let our Commander-in-Chief and military leaders make the necessary decisions to use all of our available resources to win the War effort as quickly as possible.
–POTUS and Congress working in concert with military leaders must develop an initiative (much like the WW ll Marshall Plan) to aid and support democratic governments in the Middle East after the defeat of ISIS. It will be an extensive investment and should be funded by the taxes from the War effort funds.
These types of sacrifices by Americans, corporations and Congress must be initiated to win a declared War effort. A complete effort and commitment will defeat ISIS in a short period of time because everyone in America will be involved, and citizens will demand quick action and resolution so that our Country can return to normalcy. Also, these actions will eliminate the greedy profiteering that has extended many of our previous excursions in the Middle East. The extra troops gained from the Draft, National Guard and military retirees will provide strength, and reduce the need for extended combat tours by our present young heroes.
America won WW ll, fought against two world powers on two different continents, in four years because of these types of sacrifices by our citizens. ISIS does not have a chance against this type of commitment from America working within a global coalition of Allies.
My children have left, and my husband and I just downsized to a smaller rental house. During the move, everyone in the family got to see all the waste of needing “stuff” over the years. After this, replenishing is on the bottom of my list, so I am more selective when I shop in any capacity, gifts include. Money is better saved or invested.