The SheCanTrade Black Friday Trend Tracker
Ho ho ho.
Christmas is coming. That means American shoppers are out in force. Before the Thanksgiving meal has even finished, retailers are opening their doors to entice shoppers with door busters and discounts.
About 164 million Americans plan to shop during Thanksgiving weekend, according to National Retail Federation's annual survey.
What this means for retailers
For retailers, this is a make or break season for the bottom line. Wrap this up with a bow:
The holiday shopping season accounts for more than
$1 Trillion (yes with a T) and over one quarter of annual
U.S. retail sales, according to Deloitte's 2017 Holiday survey.
That is a lot of shopping packed into the next five weeks!
What this means for traders
For traders, the retailing sector offers opportunity now. Beware, just because the holiday shopping season is right around the corner doesn't mean you should go out and buy all retailers. For example, many brick and mortar stores have suffered in recent years as shoppers have moved online.
Every day at SheCanTrade, we scour the markets searching for and finding high quality, consistent trades using both monthly and weekly options. We will be looking inside the retailing sector over the next several weeks as big moves can unfold as holiday shopping reports roll out.
Here are four Black Friday trends to watch.
1. E-commerce rules! More Americans will shop online than in brick and mortar stores in 2017.
- For the first time in survey history, online is the most popular shopping destination in 2017 cited by 59 percent of consumers in the National Retail Federation.
2. Amazon (AMZN) is a starting point and end point for holiday shoppers.
- Three quarters of shoppers expect to buy from Amazon this year, according to a Fung Global Retail & Tech survey.
3. People are spending more.
Since the 2008 global financial crisis and recession hit, holiday spending has been climbing steadily and is approaching levels not seen since 2000.
- The average American is forecast to spend $1,226 this holiday season, according to Deloitte. However, higher income shoppers (those who earn more than $100,000) are expected to spend double that or $2,226.
4. It's not just gifts that people are buying.
Options Trading Playbook
- "Experiences" are in, and 27% of those surveyed by Deloitte prefer to purchase experiences like a concert, show, vacation or restaurant outing instead of a gift.
Trading opportunities among retailers will be on a name by name basis this season. It's getting more and more difficult to pick who will and who won't be the winner.
For example, some retailers have adapted better to changing consumer trends. For example, some department stores are embracing the move online with "Buy online, pick up in store options." Concierge settings near the front door, with special parking for online purchases have popped up at retailers like Nordstrom (JWN).
Here's my cheat sheet on when to add stocks to your Watch List.
It's not just retailers that are worth a look.
Don't forget who delivers all these gifts bought online. FedEx (FDX) and the United Parcel Service (UPS) often see a seasonal bump this time of year.
The news that you hear about Black Friday results may be a near-term driver for a lot of retail names, but it is worth being choosy within the group right now. Join me in my live options trading room
and find out what stocks offer income opportunities now.
Words of Wisdom
"Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results. -- Warren Buffett.
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