Investing on Christmas Day
Ho, ho, ho! It’s that time of the year again! As over two billion people in more than 160 countries celebrate Christmas, markets are awash with red and green. Stocks won’t trade flat before or after market closures, so we’re here for investors doing their last minute shopping on the Nasdaq and co.!
Key Market Closures
The New York Stock Exchange (NYSE) is closed on Christmas Day, but you can still place your buy and sell orders ready to be filled when markets reopen at 9AM sharpish on Boxing Day! Stocks often rally before a holiday as investors rush place their bets before doors slam shut, but curveballs are common!
Where Stocks Are Headed
As soon as the holiday season began on Black Friday, retail stocks swung violently on real-time stock picking sentiment. The likes of Amazon, Walmart, Apple, and more consumer brands are slated to report their next quarterly earnings numbers in January. When they do, profit expectations will be shattered, one way or another. Stocks will make their moves at that point, so as these companies throw everything at their festive marketing campaigns, investors need to give thought to how a commercialised Christmas day might spring surprises in the New Year!
Retail Rises to the Top
The more you indulge in the spirit of giving this Christmas, the more retailers will revel in the spirit of taking! Black Friday, Small Biz Saturday, Cyber Monday, and December’s blockbuster nonfarm payrolls data gave evidence of ample shopping dollars ready for consumers to spend. However, Christmas presents are special purchases. Value-added gift wrapping, engravings, and other personalised features favour brick-and-mortar outlets. On the high street, you can get anything hand-wrapped by trained hands. On Amazon, Zappos, and Overstock.com? It’s just extra work for you.
Food, Glorious Food!
As cosy Christmas adverts soften up spenders, grocers will be busy stocking up on the full roast dinner on tray. Households in Western cultures typically feast at home on unchanging twelve-monthly dishes, instead of booking restaurants, with most of their Christmas cash falling into the hands of Walmart, Costco, and Kroger. Sweets, savouries, you name it! Consumers are happy to shop high-end at this time of year, but are on tight schedules, very tight schedules. If you hear rumours of supply chain mix ups or production catastrophes regarding mince pies or black puddings, take heed.
Decorations on the Day
Over 90 million American living rooms are about to keep Home Depot in business with Christmas tree and fairy light sales, and that says nothing of movement away from incandescent bulbs to LEDs. That may provide an under-appreciated tailwind to the revenues of Target and Kmart, but thinking about the third of fourth order of effects from this could be a good investors’ ploy to get a step ahead of the market.
Shipping by Sleigh
The more investors benefit from sales of Christmas presents, groceries, and decorations this year, the more ‘brake reindeer power’ Santa will need to deliver it all. When things go wrong in transit, the retailer normally fronts the reputational damage, which can hamstring their earnings and stock prospects.
Mail carriers and their shareholders keep two fingers crossed for good weather, with share prices often heating up as positive spending statistics filter through. Cargo carried by airlines like Southwest, United, and Delta, can help them tip earnings over the line after flying families domestically to their loved ones. And even the Big 6 railroads like Union Pacific and CSX will outperform provided their ‘freight mixes’ are weak on coal and chemicals and heavy on intermodal all-sorts!
There’ll be no escaping the Xmas bedlam this year! As far as market players are concerned, the merrier the madness, the better, so long as the day doesn’t grind to a standstill for any reason! The “retail apocalypse” is upon us, and there are massive swings in stock prices waiting for under pressure companies when their festive strategies meet a day of reckoning in the New Year!
