Black Friday - There are no discounts on the stock market. There is, however, a wish list before the Rally of St. Nicholas

Black Friday - There are no discounts on the stock market. There is a wish list for the Rally of St. Nicholas.

Black Thursday, Black Tuesday ... Generally, the stock market has a problem with the combination of the word "black", because it directly leads to associations with the Great Depression. However, over time Black Friday gains a new meaning for investors - it becomes a "bell" officially striking the time of waiting for the Rally of St. Nicholas.

Black Friday and more

Although the stock market does not like "black" days, Black Friday does not bypass it, and indirectly affects the tone given to the climate prevailing on the global dance floors. Investors focus their attention on companies from the trade industry and look forward to the rally of St. Nicholas. The effect of Black Friday on the capital market is a clear decline in investor activity. Why?

First of all, because the tradition of storming shops has established itself the day after Thanksgiving in search of opportunity. However, at the end of the first decade of the 21st century, the glow of Black Friday dimmed due to the recession, and then flared up again in countries that did not celebrate Thanksgiving.

The combination of consecutive holidays means that on the most important stock market in the world - Wall Street - the session will be shortened by half, so that brokerage house workers can go home earlier for the holiday weekend. As a result, this shortens the activity of investors, and extends the pre-holiday shopping madness, which this year begins on November 29.

It embraces those who are not following prices closely and can be driven into fear of missing opportunities and reinforce their belief in the social proof of the sheep's drive for shopping. According to Picodi website research, the total expenditure on purchases on Black Friday in Poland will exceed 2,3 billion PLN. Rzeczpospolita, in turn, calculates that this year will probably break the record of daily turnover in retail trade. The numbers are increasing year by year, and more money consumers will leave on shopping on the occasion of Cyber ​​Monday, which joined Black Friday in the year 2005 year. This is the day when the sales fever spreads to the internet and e-commerce industry. It falls this year on Monday 26 November, and this is just the beginning of shopping madness before Christmas and in the new year.

What does this mean for investors?

The moods driving consumerism are supported by investors who have got used to the shopping calendar and shortened work on Wall Street. This is confirmed by, among others record session overseas and constant expectation for a positive result of US-China trade talks.

- Investors choose optimism - says Head of the Analysis Department at TMS Brokers Bartosz Sawicki and adds that "The result is a very good start to a short week on Wall Street. Major indexes end highest in history. ".

- Increases in the stock market do not translate into trends on the currency market. While there is residual pressure on safe havens - Japanese yen, Swiss franc - there is no corresponding increase in interest in risky currencies. AUD, CAD, NOK and SEK remain locked - counter Konrad Białas, Chief Economist TMS Brokers.

According to analysts, new Wall Street summits can be dangerous because they have not been confirmed by sufficiently low extremes in the bond market. In addition, the high reading of the RSI indicator resembles the situation from April 2019.r, when the US trading floor was also in a great mood and the indices gained new heights, but instead of returning capital, the bonds began to absorb it again. The effect of inter-market divergence emerging then was a wave of bull market in the debt market and DJIA discount.

Peaks scored by stock bulls can have a positive impact on European stock exchanges. DAX is approaching this year's highs, CAC40 is less than one percent below the November ceiling, and the London floor is keen to attack local resistance. You can fault the Warsaw dance floor, where you don't see such clear intentions and demand. WIG20 is below 2200, which is not optimistic.

- The US stock indices are setting all-time highs again and again, and the S & P500 index has increased this year by about 25 percent. Against this background, the rate of return for the WIG20 contract is pale, as it fell by a few percent at the same time. JSW fares the worst among blue chips in Warsaw. The CFD rate based on the company's quotation is around 70%. less than twelve months earlier - explain Sawickai.

Litmus paper market

Acceleration of retail sales means strengthening of GDP growth, i.e. the foundation for the growth of stock indexes. In theory, customer shopping engagement is a kind of litmus test of consumer condition and sentiment in households.

- If the sales on that day are high, it may mean that the entire pre-Christmas period will be good for the industry, which will translate into a better result of economic growth. Theoretically, indices should react positively to such information. In the current conditions, however, it will be difficult for even greater gains of the SP500 or DowJones. We move through undiscovered levels. There is a real risk of spoiling the stock market climate by  one negative information from Washington - is translating Łukasz Zembik, OTC market expert at TMS Brokers.

A good sales result during the holiday season can therefore be a predictor of results  the entire shopping season, since the stock exchanges - apart from the Warsaw exception - show optimism.

- The psychological effect of Black Friday is indisputable. Investors, as well as consumers, can be convinced that December may be successful. It does not take much for the consequence of a successful Black Friday for retailers to be the St. Mikołaja, i.e. the December increase in share prices of companies - is translating Konrad Białas.

Christmas wish concert

- The biggest Christmas gift for the financial markets would be the signing of the first trade agreement by Presidents Xi Jinping and Donald Trump - he adds Bartosz Sawicki. According to TMS Brokers analysts, "the initial outline of the agreement achieved is in fact façade and will not allow the global economy to leave its breathlessness."

As they explain - at the top of the list of Christmas wishes you can also find the finalization of Brexit by approving the contract in the British Parliament and happy ending extending for entire quarters brexitowej saga. They do not hide, however, that belief in such an ending is quite naive.

- Some investors (but certainly not drivers who often visit gas stations) seem to count on a gift from OPEC and countries cooperating with the Cartel in the form of a further reduction in the volume of production, which would not allow the global oil surplus to deepen - says Bartosz Sawicki.

He also adds that "Cutting production would be a gift for Saudi Arabia, because raising oil prices would create a favorable environment for conducting the largest IPO in history, that is, making Saudi Aramco public".

- On the other hand, the unrealistic dream is the emergence of reliable symptoms that the world economy is regaining its spirit. First of all, it concerns the economies of Western Europe, especially Germany. Therefore, on our pre-Christmas list, we omit currencies and assets related to the economic situation in the Euroland. Among other things, after the recent rebound, pro-cyclical industries have lost the lion's share of their attractiveness, which in the unfavorable macro environment was based on low valuations - analyst acknowledges the pre-holiday list.