As businesses dive into Black Friday following a year upended by tariffs, the rule seems to be that the bigger you are, the more optimistic you feel. ...

Market Overview - The S&P 500 is on track for its first monthly loss since April, attributed to fears surrounding the AI bubble and a significant pullback in cryptocurrency markets [1] - Nvidia's stock has decreased by 13% this month despite a strong earnings report, while Palantir has lost 17% and Bitcoin has dropped 19% [2] Consumer Spending Trends - Online spending on Thanksgiving Day increased by 5.8% in the US, with Adobe reporting a 5.3% gain in online sales [2] - There is a noted affordability crisis affecting household spending, leading to cautious consumer behavior during the holiday shopping season [2][25] AI Sector Insights - Nvidia remains a leader in the AI chip market, but Google is gaining ground, with Alphabet's stock up over 20% month-to-date [12][31] - The AI trade has shown signs of recovery after initial volatility following Nvidia's earnings report, indicating potential stabilization in the sector [10][11] Federal Reserve and Interest Rates - Market participants are closely watching the Federal Reserve's decisions, particularly regarding potential interest rate cuts, which could significantly impact small-cap stocks [5][7] - There is speculation that the Fed may not cut rates until 2026, which could create market nervousness if expectations are not met [8] Retail Sector Dynamics - Retailers are experiencing a shift in consumer spending, with lower-income households focusing on essentials rather than discretionary items [27][28] - The holiday shopping season is characterized by a K-shaped economic recovery, where higher-income consumers are spending more, while lower-income consumers are constrained by affordability issues [25][26] Company of the Year Award - The contenders for Yahoo Finance's 11th annual Company of the Year award include OpenAI, Oracle, and Nvidia, highlighting the significance of AI in current market dynamics [33][34] - Nvidia is recognized for its central role in AI chip development and market leadership, while Oracle has gained attention for its substantial backlog [36][37]

Consumer Behavior - The consumer is characterized as stable but choiceful, being careful with spending while still participating in key shopping events [2][4] - Retailers expect strong sales during the Turkey 5 holiday weekend, but a deeper drop-off in sales post-holiday is anticipated [3] Retail Environment - Retailers like Dick's Sporting Goods and Best Buy expect more promotional and deeper discounts this year due to consumer sensitivity to pricing [4] - Retailers are raising prices to create a cushion for deeper discounts during key events, reflecting the pressure on consumers [5] Technological Impact - The upcoming holiday season is expected to be the last before widespread adoption of artificial intelligence in shopping, which will change the competitive landscape [6][7] - Retailers will need to adjust quickly to a more commoditized pricing environment driven by technology [7] Profitability Strategies - Retail media and advertising sales are becoming increasingly important for retailer profitability as pricing becomes more ubiquitous [9] - Large, well-positioned retailers like Walmart, Home Depot, and Costco are expected to benefit from their technological advancements [10] Stock Performance - Target is actively working to improve its performance, and there is a belief that the stock's potential for successful improvement is greater than currently priced in [10]

Market Overview - The CME has halted futures trading, leading to a quiet market on Black Friday, with some metals starting to trade [1] - Volatility in equity markets has decreased, with the VIX at one-month lows and a four-day winning streak for equities [1] - The S&P 500 is down only 4% from Wednesday's close, indicating a potential Santa Claus rally [1] Consumer Spending and Retail Sector - Consumer spending is expected to reach $1 trillion this holiday season, surpassing last year's estimates [1] - Retail earnings have been strong, with significant attention on upcoming reports from Macy's, Dollar Tree, and Dollar General [1] - There is a bifurcation in the market, with consumer sentiment declining while GDP growth expectations remain high at 4% for the current quarter [1] Retail Winners and Losers - Kohl's stock surged 40% post-earnings, highlighting unexpected winners in the retail space [2] - Discount retailers like Dollar General and Dollar Tree are under observation, while Costco is noted for being in a downtrend [3] Oracle's Financial Situation - Oracle's stock has dropped about 27% in the month prior to trading being halted, with concerns over rising borrowing rates [4][5] - The company is seeking a $38 billion loan to fund data centers in Texas and Wisconsin, raising credit risk concerns [6][7] - Credit default swaps for Oracle have increased, indicating heightened credit risk, with the stock down 40% from its all-time high in September [7][8]

Core Viewpoint - The decision between investing in Walmart and Costco may hinge on valuation, despite both companies showing strong financial results amid economic uncertainty [1]. Group 1: Sales Performance - Both Walmart and Costco reported a 6% annual growth in net sales in their most recent quarters, indicating similar sales performance [2]. Group 2: Profitability - Walmart's net income increased by 34% year over year, while Costco's net income rose by 11%. However, Costco's net income growth was closely aligned with its operating income, which increased by 10%, contrasting with Walmart's operating income, which fell by less than 1% due to higher operating expenses [3]. Group 3: Investment Gains - Walmart's recent profit increase was primarily driven by unrealized investment gains, which may not reflect sustainable operational performance [4]. Group 4: Valuation Comparison - Walmart's price-to-earnings (P/E) ratio is 36, while Costco's is significantly higher at 50, making Walmart appear more reasonably valued compared to Costco, despite both companies being prominent retailers on a growth trajectory [6][7].

Core Viewpoint - Investors are focusing on retailers that can thrive in a mixed economy with high prices and limited shopping budgets during the holiday season [1] Group 1 - Retailers are being evaluated based on their performance in a challenging economic environment characterized by inflation and consumer spending constraints [1]

Core Viewpoint - The article highlights concerns regarding "deferred interest" retail payment plans, which many Americans believe should be outlawed due to their complexity and potential for high costs if not fully understood and managed [1][2][3]. Group 1: Understanding Deferred Interest - Deferred interest plans allow consumers to make large purchases without immediate interest if paid off within a promotional period, but failing to do so results in retroactive interest charges, often exceeding 30% annually [2][8]. - Approximately 50% of American consumers do not fully understand how deferred interest works, leading to potential financial pitfalls [2][9]. - A WalletHub study indicates that 51% of consumers believe deferred interest should be illegal, reflecting widespread dissatisfaction with these financing options [3]. Group 2: Retailer Practices - Many major retailers, including JCPenney, Best Buy, and Home Depot, utilize deferred interest plans to encourage purchases of high-ticket items, often downplaying the associated high-interest rates in fine print [4][6]. - WalletHub has been monitoring deferred interest practices since 2012, rating retailers on the transparency of their financing offers [4]. Group 3: Consumer Behavior and Alternatives - In 2020, consumers spent over $60 billion on deferred interest purchases, with a significant portion allocated to home improvement [12]. - While about 80% of consumers using deferred interest manage to pay off their debt within the promotional period, those with lower credit scores face challenges, with only 60% successfully avoiding interest [13]. - Experts suggest that zero-APR credit cards are a better alternative, allowing consumers to avoid deferred interest altogether by only incurring interest on remaining balances after the promotional period [14].

Consumer Spending Trends - American consumers are expected to spend less this holiday season, with surveys indicating a decline of 5% to 10% in spending [1][2][6] - Gen Z consumers are the most cautious, planning to spend 23% less than the previous year [2] - The National Retail Federation forecasts a sales increase of 2.9% to 3.4%, potentially surpassing $1 trillion for the first time [2][13] Retail Environment - Major retailers like Walmart and TJ Maxx are reporting strong early sales results, indicating a potential uptick in consumer spending [2][14] - Retailers are beginning to offer Black Friday prices earlier than in previous years, suggesting a competitive market [7][8] Pricing and Tariffs - Potential price hikes are anticipated due to the elimination of the de minimis tariff, which previously allowed goods under $1,000 to enter the U.S. duty-free [3][4] - Consumers are advised to purchase gifts early to avoid potential price increases and shipping delays [5] Payment Methods - A PayPal survey indicates that half of shoppers plan to use "buy now, pay later" options for their holiday shopping, reflecting a trend towards increased credit usage [9][12] - Retailers are aggressively promoting credit card offers at checkout, which may lead to higher consumer debt [12][20] Consumer Behavior Insights - Despite concerns about spending, anecdotal evidence suggests that consumers are still actively shopping, with crowded stores observed [18] - There is a growing concern about rising credit card debt among consumers, with reports of individuals seeking loans for holiday expenses [20]

Core Insights - The trading card market, particularly for sports and Pokémon cards, is experiencing a surge in demand, prompting retailers to expand their offerings in this category [2][4][5]. Retailer Strategies - Dick's Sporting Goods has launched Collectors Club Houses in 20 locations, with plans for further expansion, to cater to the growing interest in trading cards and memorabilia [2][7]. - Target has diversified its collectibles business, including various trading card categories, and reported a nearly 70% increase in trading card sales during the first half of the year [5]. Consumer Trends - The consumer response to trading cards has surpassed expectations, with many adults purchasing them as investments [3][7]. - The popularity of trading cards has been bolstered by the pandemic, as consumers had more disposable income from stimulus checks and increased time at home [5]. Market Performance - Trading cards, including baseball and Pokémon cards, have outperformed the S&P 500 in recent years, although predicting their future trajectory remains challenging [3][8]. - Analysts suggest that the growth in the collectibles market is driven by adult consumers, as traditional toy markets face demographic challenges [10].

Core Insights - Strong consumer demand is expected during the holiday season, with Americans planning to spend significantly more than in previous years, indicating resilience despite economic pressures [1][10] Spending Expectations - Shoppers anticipate an average spending of $2,800 this holiday season, which is an increase of over $1,000 from last year [2][8] - Millennials are projected to spend the most, averaging around $4,400, while Baby Boomers expect to spend the least at approximately $1,600 [2] Economic Context - Despite a decrease in inflation from its peak in summer 2022, prices have still risen by 3% year-over-year as of September, influenced by tariffs from the previous administration [3] - Over 62% of consumers reported changing their shopping habits due to uncertainty related to tariff-induced price increases [3][8] Shopping Strategies - Consumers are adopting smart shopping strategies to manage their budgets, such as seeking sales, purchasing clearance items, and opting for more affordable brands [4][8] - Black Friday is anticipated to attract a record number of shoppers, providing opportunities for consumers to find deals [5][10] Retail Sales Projections - Retail sales during the holiday season are expected to exceed $1 trillion, up from $976.1 billion in 2024, reflecting strong consumer demand despite ongoing cost pressures [8][10]