Black Friday, November’s last trading day, early close: 3 things to watch for Friday

Jennifer Yen pulls to shopping carts full of items at Wal-Mart Supercenter in Denver, Colorado.

Bloomberg | Bloomberg | Getty Images

Here are the most important things to know about Friday before you hit the door.

1. Black Friday

Black Friday, the day retailers have long relied on to boost sales, is losing its grip on shoppers. With online shopping becoming mainstream, it’s harder for struggling department stores to drive shoppers to malls, analysts said.

Apparel-driven retailers such as Kohl’s, Macy’s, and Gap will suffer the most given heightened competition, sustainable options and faster fashion, Cowen analyst Oliver Chen predicted. Earlier this month, Macy’s and Kohl’s slashed their annual profit outlooks, while Nordstrom‘s sales were down 2.2% from a year ago.

“We foresee a highly promotional holiday environment that retailers should be prepared for given a tough 3Q particularly for women’s apparel and mall and department store retailers,” Chen said in a note.

Still, an improvement in consumer sentiment and an impressive bull market run this year should still prompt spending and boost sales overall.

The National Retail Federation estimates sales should grow by about 4% in the holiday shopping season. JP Morgan analysts said they expect sales to be up 4.9% during the holidays, much stronger than last year’s 1.9% growth.

The top performing retail stocks this year heading into Black Friday are Best Buy, up 51%, and Costco, which is up 48%. Amazon shares are up 21% this year so far.

2. Best month for stocks since June

Friday is the last trading day for the month of November. The S&P 500 has climbed more than 3% this month, on pace for the best monthly performance since June. The rising optimism around U.S.-China trade talks has fueled the market rally this quarter. Recession fears have also receded as better-than-expected economic data boosted investor sentiment.

However, risks still persist as the U.S. and China haven’t announced a timeline for signing the so-called “phase one” trade deal. Time is running out as the final tranche of 15% tariffs on Chinese goods is set to kick in on Dec. 15.

3. Early close for markets

Major stock exchanges will close early, at 1 p.m. ET on Friday. The bond market also will close up shop early at 2 p.m. ET. Stocks, which have been hitting new records day after day recently, will seek to regain its winning ways around the holiday.

In the past 66 years, the Dow Jones Industrial Average has only posted 16 losses on the Wednesday and Friday surrounding the holiday, combining results from the two days, according to the Stock Trader’s Almanac. But stocks have been down in the holiday period for the past two years. We’ll see if the market can break the losing streak.

Wednesday’s gain was a good start.

Major events (time ET):

8:30 a.m. U.S. weekly export sales

1:00 p.m. NYSE closes

2:00 p.m. Bond market closes

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