Many Americans will be enjoying a four-day weekend and a somewhat relaxed work environment this week. For Amazon.com, Inc. (Nasdaq: AMZN), Wal-Mart Stores Inc(WMT) and other U.S. retailers, though, Thanksgiving week may be the most important of the year.
Retail investors are hoping this year’s Black Friday sales event will help salvage what has been a horrendous year in the market. The Standard & Poor’s 500 index is up 15.4 percent in 2017, yet the SPDR S&P Retail (XRT) exchange-traded fund is down 4.6 percent on the year as many retailers struggle with online competition.
According to the National Retail Foundation, 154 million Americans did some form of shopping over Thanksgiving weekend last year. The organization expects Americans to spend $680 billion total this holiday season, much of which will be split between Black Friday and Cyber Monday.
If history is any indication, retail stocks could get at least a short-term boost this week. Since 1945, the S&P 500 has traded higher during Thanksgiving week 75 percent of the time. In the past 10 years, S&P 500 retail stocks have traded higher during the two-week period starting Thanksgiving week all 10 years, averaging an overall two-week gain of 5 percent, according to data analytics firm Kensho.
Amazon and Walmart, two stocks that have been immune to the overall retail weakness this year, are expected to lead this year’s online holiday sales push. Walmart got off to a bumpy start on Monday when Goldman Sachs analyst Matthew Fassler downgraded the stock from “buy” to “neutral.”
Fassler says Walmart stock is currently fully valued after gaining 40 percent year-to-date. For longer-term investors, Fassler says it’s still a winner. “WMT has solidified its transition to a winner in today’s tricky retail climate by stabilizing share trends and growing earnings, all while investing in next-generation channels and technologies,” Fassler says.
J. Rogers Kniffen CEO Jan Kniffen says there are pockets of investing opportunities within the battered retail sector. “I think…
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