Black Friday Awash With Green As Markets Finish Their Best Month of 2024

For practical economic reasons related to his being a mythical figure, Santa’s generosity is capped by consumer sentiment. This year, his North Pole workshop is mighty busy.

Initial data from Adobe and Salesforce suggest, despite fears of skittishness, US consumers poured a record amount of cash into online retail on Black Friday. Coupled with other indicators, that suggests financial markets are poised to close the year with a bounteous holiday spirit.

Fairy Retail

Adobe estimates Americans spent $10.8 billion on online Black Friday purchases, up 10.2% year-over-year – and that’s on top of $6.1 billion spent online on Thanksgiving Day, which was up 9% over the same period. Salesforce estimates an even greater $17.5 billion spend on Friday, up 7% YoY. Sales growth at brick-and-mortar stores was more muted, at just 0.7% YoY, according to preliminary estimates by Mastercard.

Overall, the numbers bode well for the National Retail Federation’s forecast that winter holiday spending will grow 2.5% to 3.5% this year — to between $979.5 billion and $989 billion, compared with last year’s $955.6 billion. It’s also a good sign for retailers who will welcome the news — like Walmart, which topped Wall Street’s revenue estimates in the third quarter and saw its share price rise 11.8% in the last month — and others who needed the news — like Target, which missed analysts’ expectations in the third quarter and saw its shares fall 11.4% in the past month. The markets will also appreciate the apparent consumer optimism after a blockbuster November:

• The S&P 500 and Dow Jones Industrial Average scored record closing highs during the shortened Black Friday session, their respective 53rd and 47th record closes of the year. The S&P 500 gained 5.7% and the Dow 7.5% in November in one of the best months of the year for investors.
• It’s not just the Blue Chip indexes in a post-election, pre-Christmas boom: the Russell 2000 small-cap index was up 10% in November, its best month since December 2023, and the S&P Mid Cap 400 rose 8.7% for its best month since June 2023.

Fortune Teller: The S&P 500 has gained 27% this year. In the years where the index has gained more than 20% through November, it has risen 76% of the time in December for a median gain of 2.1%, according to Ned Davis chief US strategist Ed Clissold. In a note to clients last week, Clissold said the last time the S&P declined in the final month of the year after a 20% gain through November was 1996.