The Black Friday Effect: Financial Markets Behaviour During Sales Season

Image

By FBS

As Black Friday approaches, global broker FBS delves into the relationship between the year’s biggest sales season and its impact on the financial markets. The FBS analysts particularly discover the trends of the world’s largest economy – the American. They analysed reactions across assets and macroeconomic conditions to understand the Black Friday impact better.

What influences the Black Friday numbers

FBS analysts highlight three critical indicators for gauging Black Friday’s impact on the US economy: the number of buyers, the average amount spent, and the total spending.

Over the past 18 years, notably successful in terms of total spending were 2012, 2017, 2019, 2020, and 2022, when the collective expenses of American consumers exceeded $60 billion on average.

Regarding the number of buyers, the period after the subprime mortgage crisis, from 2010 to 2014, was the most active, with the number of American Black Friday shoppers consistently surpassing 200 million. As FBS analysts point out, a correlation with the Federal Reserve’s key interest rate is evident – the rate reached a minimum of 0.25% in 2010 and pushed Americans to participate in Black Friday sales. The following consumer peak was spotted after the COVID crisis, as the Fed had eased the key again, leading to Black Friday numbers soaring to 190 and 186 million in 2019 and 2020, respectively. This was a result of the increased liquidity in the system.

Notably, 2022 deviated from the previously established trend. Despite the 4% key rate, around 197.6 million Americans did their Black Friday shopping and collectively spent over $64 billion. FBS financial market analysts attribute this phenomenon to substantial market liquidity and increased consumer opportunities.

How financial markets react to Black Friday

To understand how financial markets reacted to Black Friday, FBS examined the movement of the S&P 500 index and a separate S&P consumer sector index from 2005 to 2022. Surprisingly, the market reacted more to sales reports than Black Friday, with a predominantly adverse reaction (66% of cases) observed in the S&P 500 index after the report was published.

FBS analysts particularly note that Individual companies, primarily in the consumer sector, exhibit adverse reactions to Black Friday reports. Notable examples include Amazon, Nike, and Home Depot.

Market Expectations

Considering the current macroeconomic situation, FBS analysts anticipate a potential slowdown in sales momentum this Black Friday, which could disappoint the retail sector. However, Black Friday’s influence is not confined to the retail sector but extends its impact to the broader stock market. FBS advises paying attention to the final numbers for the comprehensive global market situation analysis. A decline in consumer spending may signal an economic slowdown.

Disclaimer: This material does not constitute a call to trade, trading advice, or recommendation and is intended for informational purposes only.

Share
Related Stories
Image
20-February-2024

Nigeria Shops for $10bn to Increase FX Liquidity for Strong Naira

By Dipo Olowookere The Nigerian government is looking to raise at least $10 billion from various sources as part of its effort to increase foreign exchange (FX) liquidity to strengthen the Naira in the currency market. The Naira has been on a free fall in the past few months as the nation battles with a shortage in forex supply due to a decline in crude oil production, which the country relies heavily on for FX earnings. At the parallel market on Tuesday, the Nigerian currency weakened against the US Dollar to N1,820/$1, raising fears that it could crumble to N2,000/$1

Image
22-February-2024

NPPAN Targets $10bn Contribution to Nigeria’s GDP via Palm Biomass

By Adedapo Adesanya The federal government will sign a Memorandum of Understanding (MoU) with the Malaysian government to develop palm biomass in the country as part of efforts to utilise one of the undertapped farm produces in the country. Mr Alphosus Inyang, President of the National Palm Produce Association of Nigeria (NPPAN), made this disclosure, saying palm biomass is a multi-billion dollar economy. “Biomass simply means agricultural waste and we are talking about turning waste into wealth,’’ he said in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja. The president said NPPAN was working with

Image
21-February-2024

Naira Gains at NAFEX as Govt Tries Unorthodox Means to Stabilise FX Market

By Adedapo Adesanya The Naira appreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, February 20 as the government and the Central Bank of Nigeria (CBN) applied unorthodox measures to arrest the free fall of the local currency. In the official market yesterday, the Nigerian Naira gained 2.9 per cent or N47.3 on the Dollar to close at N1,551.24/$1, in contrast to the previous day’s N1,598.54/$1. However, the domestic currency lost N92.60 against the British Pound Sterling during the session to quote at N2,023.64/£1 compared with the preceding day’s N1,931.04/£1 and against the

Image
22-February-2024

Investors Recover N165bn as FBN Holdings, BUA Cement, Others Gain

By Dipo Olowookere The bulls recaptured the Nigerian Exchange (NGX) Limited on Wednesday after the bears dominated for two straight days as a result of panic selling due to the macroeconomic environment, especially with the poor performance of the Naira in the foreign exchange (FX) market. During the midweek session, the local bourse finished higher by 0.30 per cent on renewed bargain-hunting activities by investors. This raised the market capitalisation of the domestic exchange by N165 billion to N55.464 trillion from N55.299 trillion, as the All-Share Index (ASI) grew by 301.71 points to 101,362.38 points from 101,060.67 points. Business Post

More Stories
Image
14-February-2020

For the Love of Corn: HO Corn Blazing a Trail in Agribusiness

The greatest irony of the Nigerian state is the oppressive conspicuousness of poverty of the mass of the citizenry in the midst of glaring opportunities. Or, maybe not so glaring. One thing that cannot be gainsaid is the potentials in the agricultural sector to drive the Nigerian economy on a grand scale. This point cannot be overemphasized.* As against the hitherto held belief that only the cash crops could drive the economy on a large scale, food crops are as lucrative (Mr. H. O. Andrew may say, MORE) as the cash crops. This is especially true of corn that is

Image
01-March-2021

Shell to Assist Nigeria Boost Gas Usage to 5bcf/d

By Adedapo Adesanya Shell Petroleum Development Company of Nigeria Limited (SPDC) has restated its commitment to help grow gas usage in Nigeria to 5 billion cubic feet of gas per day (bcf/d) from its current 1.7 bcf/d by 2022. This was disclosed by Mr Osagie Okunbor, the Managing SPDC Director and Country Chair of Shell Companies in Nigeria, while speaking at the Nigerian Gas Association’s 12th International Conference and Awards, held virtually under the theme Powering Forward: Enabling Nigeria’s Industrialization via Gas. Mr Okunbor pledged support to the federal government’s goal of using the country’s proven gas reserves to trigger

Image
14-August-2018

Federal, States Local Governments Share N669b in June

By Modupe Gbadeyanka The sum of N668.9 billion was shared among the three tiers of government in Nigeria in the month June 2018. This was from the revenue generated by the Africa’s largest economy in the month of May 2018. According to the National Bureau of Statistics (NBS), the money was shared to the three beneficiaries by the Federation Account Allocation Committee (FAAC), which is saddled with such responsibility. The stats office disclosed that the amount disbursed comprised N575.48 billion from the Statutory Account and N93.42 billion from Valued Added Tax (VAT). It said further that federal government received a

Image
20-October-2016

No Plan To Shut Down Access Bank Branch—Ekiti Govt

By Dipo Olowookere The Ekiti State Government has reacted to reports that it plans to shut down a branch of Access Bank in the state for ‘detaining’ Mrs Precious Fani-Kayode, wife of a former Minister of Aviation, Mr Femi Fani-Kayode, on the instruction of the Economic and Financial Crimes Commission (EFCC) on Monday. Mrs Fani-Kayode had gone to a branch of the bank in Ado Ekiti, the state capital, to make a transaction, but was ‘detained’ because her account was flagged by the anti-graft agency. It took the intervention of the state Governor, Mr Ayodele Fayose, to free the woman

Image
15-December-2019

SEC, Lagos Government Meet on N100bn Bond Sale

By Dipo Olowookere Officials of the Securities and Exchange Commission (SEC) are inspecting some ongoing projects by the Lagos State government in the metropolis. The reason for this is to assess what the government plans to use proceed of its proposed N100 billion bond issuance on when finally sold to investing public probably next year. Recently, the Lagos State House of Assembly (LAHA) gave approval to Governor Babajide Sanwo-Olu to issue the debt instrument worth N100 billion to investors so as to raise funds to complete some projects in the state. In order to make the process transparent and ensure

Image
19-January-2022

Nipco, Two Others Depress Unlisted Stock Market by 0.37%

By Adedapo Adesanya The unlisted stock market went down by 0.37 per cent on Tuesday following a decline in the prices of Nipco Plc, Niger Delta Exploration and Production (NDEP) Plc, and Central Securities Clearing Systems (CSCS) Plc. Business Post reports that the NASD Over-the-Counter (OTC) Securities Exchange could not sustain the bullish run it recorded the preceding sessions as a result of the fall posted by the trio. Consequently, the market capitalisation decreased by N2.34 billion to close the day at N633.06 billion in contrast to the previous day’s N635.40 billion, while the NASD Unlisted Securities Index (NSI) depleted

Image
30-April-2020

May Day: Uduk Advises Nigerian Workers to Invest in Capital Market

By Dipo Olowookere Acting Director General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, has advised Nigerian workers to consider investing in the capital market. In her goodwill message to commemorate the 2020 International Workers Day slated for Friday, May 1, the SEC chief said investing in the Nigerian capital market will help workers create wealth and save towards their retirement. According to Ms Uduk, despite of the COVID-19 pandemic, operations at the capital market were still on-going without disruption. She urged workers to take advantage of the various opportunities for wealth creation that abound in the market,

Ad
Ad
Recent Stories
Image
22-February-2024

Lagos Plans Daily Free Meal for Residents, Markets for Cheap Food Items

By Modupe Gbadeyanka About 1,500 residents of Lagos State will have access to one free meal per day to cushion the effect of the economic hardship in the country, Governor Babajide Sanwo-Olu has declared. Mr Sanwo-Olu, while answering questions from journalists during a media chat on Thursday, said his administration would establish at least 42 Sunday Markets across the metropolis for cheap food items, though the commencement of this initiative is yet to be revealed. There has been a pocket of demonstrations across the country over the rising hunger in Nigeria as a result of high inflation and the devaluation

Image
22-February-2024

WINBAFRICA Plans Big for 10th Anniversary

By Modupe Gbadeyanka All is now set for the 10th anniversary of WINBAFRICA themed Bridging the Gap: Celebrating a Decade of Nation-building. The organisation is gathering stakeholders together on Monday, February 26, 2024, for the event at the Alliance Francaise in Ikoyi, Lagos. The group was formed in 2014 and has since then promoted girl-child education and empowered women and young girls in critical thinking and leadership skills in secondary schools across Africa. As part of activities lined up for this year’s celebration, WINBAFRICA organised an annual school debate competition and scholarship programme for 20 young girls across the continent.

Image
22-February-2024

Nigeria Posts 2.74% GDP Growth in 2023

By Adedapo Adesanya Nigeria’s economy grew by 2.74 per cent in 2023, lower than the 3.1 per cent posted in 2022. This was disclosed by the National Bureau of Statistics (NBS) in its latest Nigeria Gross Domestic Product Q4 2023 Report released on Thursday. While the country’s economic growth was lower than the preceding year, it grew by 3.46 per cent (year-on-year) in real terms in the fourth quarter of 2023. This growth rate is lower than the 3.52 per cent recorded in the fourth quarter of 2022 and higher than the third quarter of 2023 growth of 2.54 per

Image
22-February-2024

Nashaira Belisa Takes Project OMI to Lagos Orphanage, School

By Adedapo Adesanya  Miss World Curacao 2024, and Curaçao’s delegate to Miss World 2024 in India, Miss Nashaira Belisa, an influential humanitarian and businesswoman, has launched PROJECT OMI. OMI, meaning water in the Yoruba Language, is a transformative initiative focused on addressing the critical need for clean water in orphanages and communities across Nigeria and Ghana. She is using this initiative to change the world, one drop of water at a time. The project, aptly named OMI, is a testament to Belisa’s commitment to making a lasting impact beyond the realm of beauty pageantry. Belisa’s dedication to clean water accessibility

Image
22-February-2024

Senate Confirms Cardoso, Yuguda, 10 Others as CBN MPC Members

By Adedapo Adesanya The Senate has confirmed the appointment of 12 persons as members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) ahead of next week’s eagerly awaited interest rate-setting meeting. This confirmation comes after a report of the Committee on Banking, Insurance and other Financial Institutions was considered during plenary on Thursday. The confirmation of the new MPC members comes days before the first policy meeting of the apex bank under the new CBN governor, Mr Olayemi Cardoso, who by his position will be the chairman of the committee. The meeting has been slated

Image
22-February-2024

Purple Real Estate Welcomes Umar, Oladimeji to Board

By Adedapo Adesanya Nigerian real estate platform, Purple Real Estate Income Plc, has made significant changes to its board, marking a pivotal moment in the company’s growth strategy amid current macro headwinds. The reshuffle brings on Mr Aminu Umar and Mr Olasunkanmi Oladimeji to join the board as Non-Executive Director and Executive Director. The duo of Mr Umar and Mr Oladimeji will take over from Mrs Osareme Archibong and Mrs Fiona Ahimie, both outgoing Independent Non-Executive Directors, according to notice on NASD OTC Securities Exchange, where the company trades its securities. Commenting on the changes, the Chairman of the board,

Image
22-February-2024

AFCON 2023: Nigerian Content Creators See 200% Rise in Revenue, Views

By Adedapo Adesanya Content creators in Nigeria saw a 200 per cent increase in views and revenue between December 2023 and February 2024, a new study shared with Business Post showed. According to new data released by StarNews Mobile, an African video streaming platform, content creators across Africa experienced a 300 per cent surge in revenues during the 2023 Africa Cup of Nations (AFCON) held between January 13 and February 11, 2024, reaffirming the massive surge in consumption of hyper-localized content from the continent. Based on metrics from StarNews Mobile’s platform, creators in Nigeria were only outshone by their peers

Image
22-February-2024

Two Die, 15 Rescued in Ikoyi-Lekki Link Bridge Boat Mishap

By Modupe Gbadeyanka Two persons have been confirmed dead in a boat accident that occurred on Wednesday night at the Ikoyi-Lekki Link bridge in Lagos. The Lagos State Emergency Management Agency (LASEMA), which confirmed the incident, stated that 15 persons were rescued in the mishap. The agency stated that the boat, which was conveying 17 passengers, was heading to the Ikorodu area of the metropolis from its take-off point, Sandfil, when it capsized at the Powerline area of the popular bridge. It said the body of a female passenger, who drowned, was recovered, while the corpse of the male passenger

Image
22-February-2024

NPPAN Targets $10bn Contribution to Nigeria’s GDP via Palm Biomass

By Adedapo Adesanya The federal government will sign a Memorandum of Understanding (MoU) with the Malaysian government to develop palm biomass in the country as part of efforts to utilise one of the undertapped farm produces in the country. Mr Alphosus Inyang, President of the National Palm Produce Association of Nigeria (NPPAN), made this disclosure, saying palm biomass is a multi-billion dollar economy. “Biomass simply means agricultural waste and we are talking about turning waste into wealth,’’ he said in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja. The president said NPPAN was working with

Image
22-February-2024

Salesforce Introduces Clean Energy Programme Management

By Modupe Gbadeyanka A new solution to help electric, gas, and water utilities increase customer participation in clean energy programmes has been introduced by Salesforce. The initiative known as Clean Energy Programme Management for Energy & Utilities Cloud streamlines the launch, management, and oversight of energy efficiency, conservation, electrification, and EV charging programs. It helps utilities manage clean energy initiatives with connected data — like energy usage and billing information — and personalised engagement to promote relevant programmes. This platform also digitises and simplifies the application process for customers, participating contractors, and utility program staff to help increase clean energy