Consumer Activity under the Spotlight in Coming Weeks
With the famed Black Friday less than two weeks away, and consumers suffering from what has been coined as “frugal fatigue”, the US consumer is under the spotlight as Wall Street investors look for signs that the US economy may, in fact, be on the road to recovery, spurred on by consumers who are tired of economizing and may throw caution to the winds for their festive season shopping. With Thanksgiving in the US taking place on the fourth Thursday of November each year, the Friday following Thanksgiving is the unofficial beginning of a festive season shopping season which has been known to continue into the New Year. Referred to as “Black Friday” because the annual consumer spending spree drags a lot of retailers out of the red and into the black financially speaking, many consumers take the day off work, descending on retail stores in their hordes to spend some quality time with their credit cards. While this may sound like a nightmare to many people, Black Friday devotees insist that it is well worth the effort, as competition is stiff and prices are often reduced to cost or below for a predetermined number of items to lure buyers into stores – the trick is to be there first.
The market has experienced two weeks of gains and investors are no doubt hopeful that the trend will continue into the coming week as they anticipate the release of a round of economic reports. The week starts off with October’s retail sales report from the government being released before the opening bell. Analysts are predicting a rise of 0.9 percent for last month, following the 1.5 percent drop experienced in September. Midday on Monday sees Federal Reserve chairman Ben Bernanke delivering a speech on the US economic outlook at New York’s Economic Club, where he is likely to reiterate that interest rates will remain low for some time to come.
Tuesday sees the release of the government’s producer price index, as well as figures on capacity utilization and industrial production. Quarterly financial results are expected from Fortune 500 companies Home Depot, Target and TJX Companies. Wednesday focuses on housing starts and building permits in the housing market, with the US government inflation gauge set to reveal October’s results. On Thursday, the Labor Department will make known the number of Americans filing new unemployment benefit claims. Fortune 500 companies reporting quarterly earnings on Thursday include Sears Holdings, Hewlett Packard and Gap.