Weekly reviews

Black Friday And Cyber Monday: How Do They Affect Markets?

While for some people Thanksgiving may still be a day to thank ‘god’ for the blessing of the harvest (office jobs also apply?), nowadays is a holiday associated with two very commercial events: Black Friday and Cyber Monday. I know… sweet deals are always welcome by our pockets, but thinking from an investor’s perspective, are these dates really worth it for retailers?

Allow me to put it this way, these two are some of the most important days in the year for retail businesses across America and well… around the globe (hello globalization!).

Not convinced about my words? Take a look at these figures:

Year Average Ticket Total Spent % YoY Increase
2015 $805.65 $626.1 billion 3.2%
2016 $935.58 $655.8 billion 3.6%
2017 (forecast) $967.13 $682.0 billion 4.0%

Basically, Black Friday kicks off the holiday season with some pretty aggressive offers meant to boost consumption among masses in categories such as electronics to flights or clothing.

These commercial days are also useful to understand more about the performance of businesses. For instance, if a retailer does not perform as expected on Black Friday (BF) or Cyber Monday (CM), then that could a potential sign that things are not going very well.

If consumers do not spend as much as analysts initially predict, then that speaks about a poor performing economy or low levels in consumer confidence. In other words, economic health.

In stock markets, BF or CM could promote growth in the short term on expectations of better earnings for the fourth quarter, also keeping into account Christmas is just around the corner.

As for currencies, these dates are usually not responsible for any particular movement. But if sales are better-than-expected, the dollar could see some extra gains.

Businesses also tend to hire more people during the holiday season to cope with an increasing number of customers, which is seen as a positive effect for the labor market.