Holiday shopping and the stock market
Retailers and the markets are nervously awaiting the U.S. holiday shopping season, which traditionally starts with Black Friday, the day after Thanksgiving. Black Friday usually has the most foot traffic in stores, but the heaviest shopping day in terms of sales volume is usually the Saturday before Christmas. The markets also will be watching sales volume from Cyber Monday, which is the unofficial kick-off of the online shopping season.
A lackluster holiday shopping season appears likely this year. Shoppers so far in 2009 have focused on finding bargains and shopping in discount stores such as Wal-Mart and that trend is likely to continue through the holiday season. The U.S. recession may be officially over in terms of the economic statistics, but many U.S. consumers are in worse shape now than they were earlier this year when the economy hit bottom. The U.S. unemployment rate in October rose to a 26-year high of 10.2%, which is only 0.6 points below the post-war record high of 10.8% posted in 1982. Home prices have stabilized but they are still sharply below peak levels, which means that consumers have considerably less wealth than they had before the housing crisis. Moreover, First American CoreLogic reported earlier this week than one in four homeowners is now underwater on their mortgage, which means one in four homeowners can’t borrow any more money on their home and can’t even sell the house without producing the difference in cash or defaulting on the mortgage in a short sale. Credit card defaults are running near record highs and the majority of shoppers are not going to want to run up their credit cards any higher during the holiday shopping season. U.S. real household wealth is down 19.3% from the Q2-2007 peak.
The sour consumer situation suggests a poor holiday shopping season that will do little to help along the nascent U.S. economic recovery. Holiday sales this year can certainly beat last year’s sales, which occurred in the midst of the worst banking crisis since the Great Depression. However, the International Council of Shopping Centers is predicting a holiday shopping sales increase of only 1-2% over last year, which is not particularly impressive given that sales last year fell by about 5%, causing an easy-to-beat year-earlier base.
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The numbers below represent the Commercial Net Traders positions taken from the weekly Commitment of Traders (COT) report released by the Commodity Futures Trading Commission each Friday. You will find a 12-month high and low with the past 2 weeks of data. To see the past 52 weeks of commercial data please visit www.pricecharts.com. Simply open Analysis under the Resource category at the top of the screen and click on the Commercial Tracker on the left side selection menu. You will find this to be a very interesting presentation of the commercial COT information.
Commercial Net Tracker instructions
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A. If the current value is at a 12-month low, the cell will display a red/burgundy background. B. If the current value is at a 12-month high, the cell will display a green background. C. If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D. If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Commodity | 12-mo low | 12-mo hi | 30-Nov | 20-Nov |
| Cattle (feed) | -3,350 | 5,139 | 2,484 | 2,219 |
| Cattle (live) | -9,974 | 30,346 | 4,217 | 4,448 |
| Hogs | -7,709 | 35,452 | -7,709 | -1,406 |
| Corn | -113,201 | 81,644 | -58,662 | -51,273 |
| Oats | -3,981 | 2,198 | -3,981 | -3,688 |
| Soybeans | -112,075 | 16,898 | -79,935 | -61,328 |
| Soybean meal | -82,472 | -1,533 | -50,054 | -40,919 |
| Soybean oil | -51,608 | 20,995 | -51,608 | -50,739 |
| Wheat | -1,318 | 57,345 | 23,395 | 32,752 |
| Orange juice | -17,748 | 1,627 | -14,964 | -14,848 |
| Coffee | -37,958 | 12,520 | -24,876 | -25,952 |
| Cocoa | -41,626 | -9,795 | -41,626 | -37,917 |
| Sugar | -249,405 | -72,825 | -179,156 | -181,217 |
| Cotton | -57,834 | 16,051 | -57,834 | -52,178 |
| British pound | -1,717 | 76,698 | 7,575 | 3,076 |
| Canada dollar | -67,971 | 20,555 | -42,880 | -41,941 |
| Euro FX | -75,540 | 19,432 | -36,580 | -31,252 |
| Japanese yen | -67,682 | 20,214 | -59,060 | -45,005 |
| Swiss franc | -37,877 | 22,561 | -32,707 | -31,956 |
| US dollar index | -16,367 | 14,351 | -1,587 | 2,576 |
| Mexican Peso | -92,681 | 21,127 | -92,681 | -58,229 |
| Australian dollar | -74,823 | 12,540 | -63,184 | -70,253 |
| S&P 500 | -100,460 | -23,326 | -66,023 | -60,618 |
| T-note -10 yr | 22,017 | 230,176 | 73,520 | 104,383 |
| T-bond -30 yr | 38,327 | 163,627 | 102,886 | 119,986 |
| Eurodollar | -971,110 | -222,700 | -808,717 | -900,810 |
| Crude oil | -116,119 | 7,089 | -105,336 | -112,612 |
| Heating oil | -68,934 | -4,419 | -41,856 | -46,186 |
| Unleaded gas | -82,087 | -26,770 | -63,496 | -66,441 |
| Natural gas | 71,144 | 135,642 | 128,210 | 135,642 |
| Copper | -13,039 | 29,085 | -13,039 | -11,421 |
| Gold | -306,104 | -94,288 | -306,104 | -281,546 |
| Platinum | -26,184 | -6,629 | -26,164 | -26,184 |
| Silver | -66,004 | -24,751 | -64,445 | -58,3 |
To view the entire year of commercial data please visit www.pricecharts.com.
Charts provided by www.pricecharts.com
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