How Black Friday Could Impact the Stock Market in 2024

Black Friday, one of the most anticipated and significant days in retail, falls on the Friday following Thanksgiving in the United States. It has become not only a kick-off for the holiday shopping season but also an early indicator of economic activity success. Black Friday may trigger what is known as the “Santa Claus Rally,” a period where stock markets generally experience growth from late December to early January. In this article, we will examine how Black Friday could impact the stock market in 2024.

Fundamental Analysis

According to data from the Federal Reserve Bank of St. Louis, consumer spending accounts for approximately 70% of the United States’ gross domestic product (GDP). Some analysts consider stimulating spending a key factor in maintaining economic activity. Therefore, sales data on Black Friday is viewed as an important indicator of the country’s economic condition.

In 2024, Black Friday is particularly significant against the backdrop of actions by the Federal Reserve System (FRS), which has begun a cycle of lowering interest rates. The level of consumer spending during sales may provide insight into the current state of the economy and influence future monetary policy by the FRS.

Impact on the US Stock Market

Analyzing data from 2001 to 2023, there have been fluctuations in the S&P 500 index during Black Friday periods, with an overall positive trend. For example, the S&P 500 showed growth of more than 1% only in 2001, 2007, and 2012, while in 2009, the stock index fell by 1.7%. Thus, despite seasonal factors, it is difficult to identify a clear repeated trend.

According to Yahoo Finance, a positive trend can be identified in the retail sector. The stocks of some companies tend to show positive dynamics during the week before and after Black Friday.

History shows that:

– In 2013-2023, the retail sector as a whole outperformed S&P 500 at the end of November;

– From 2007 to 2017, some stocks from the retail sector, included in S&P 500, demonstrated up to 5% returns compared to an average return of 3% for the index over the same period.

Black Friday 2023

According to the National Retail Federation (NRF), in 2023, around 200 million people made purchases during Black Friday, spending an average of $321.41 per person, setting a historical record. Large retailers such as Amazon, Walmart, and Target were able to capitalize primarily on their online platforms and marketing strategies, as more and more consumers chose the convenience of e-commerce.

What Traders Can Expect from Black Friday 2024?

According to NRF forecasts, in 2024:

– About 34% of Americans are expected to make purchases on Black Friday;

– Spending is expected to reach a new record, increasing by 3% compared to 2023.

Additionally, 71% of consumers surveyed by Deloitte reported that they will make online purchases in 2024, highlighting a significant shift towards e-commerce. However, it is impossible to predict exactly how Black Friday will impact the stock market in 2024. Each year has its unique characteristics related to political and economic conditions. An increase in consumer spending may positively affect company financials and lead to a rise in stock prices and a bullish trend in S&P 500. Nevertheless, individual factors will have a significant impact on the market, and traders should closely follow macro trends and company financial