Last week was a short one, with the stock market closed Thursday and a shortened session Friday, but all the major indices were indeed up nicely for the week. That move extended the market rebound that began Nov. 16, and the Dow Jones Industrial Average is now up 6.5% year to date. The S&P 500 and the Nasdaq Composite Index are respectively up a more impressive 12% and 13.9% for 2012.
The shortened trading week was due to Thanksgiving, which happens to be my favorite holiday. We saw no meaningful movement on "fiscal cliff" dealing last week, so investors appeared to be assuming that no news means good news -- which means they were focused more on fundamentals than they were on political "maybes."
Those fundamentals showed that the housing recovery continued in October, with new housing starts and existing home sales rising from the prior month. The underlying data in the existing-home-sales report showed a continued drop in the month's supply, as well as steady increases in the median price bodes well for new housing construction. Over the past few months, as the industry data has firmed, I have shifted my view on the housing market from skeptical to hopeful. That said, the real long-term driver of housing demand is job creation. So, while there is reason to think the housing recovery has more room to go, a long-term boom is not likely until job creation accelerates from the current tepid levels.
Last week also marked the kick-off to the 2012 holiday shopping season, and early reports are mixed. ShopperTrak, which measures and analyzes foot traffic at more than 50,000 retail locations nationwide, reported Black Friday store visits climbed 3.5% from last year to more than 307.67 million. However, retail sales for the day fell 1.8% to $11.2 billion.
Blurring the line between in-store price comparison shopping and Internet-based, stay-at-home shopping, IBM reported that, on this year's Black Friday, we saw a two-thirds increase in the number of consumers using their mobile device to make a purchase vs. 2011. According to IBM, Apple's (AAPL) iPad comprised nearly 10% of online shopping traffic on Black Friday this year, while the iPhone brought in almost 9%. Google (GOOG)-powered Android devices accounted for 5.5%.
With 29 shopping days left until Christmas, investors and consumers will be watching retail sales and other promotional activity in the coming weeks. Investors will be looking to see who's winning dollar share and who is compromising profitability the least, while consumers will be looking for the best deals to stretch their holiday shopping dollars.
Even though the number of companies reporting their quarterly results has tapered off, this week we'll get a host of retailer results. From a timing perspective, these companies are likely to be a litmus test of sorts for the Black Friday/Cyber Monday shopping weekend. From Ulta Salon (ULTA) to Ann Taylor (ANN) to Tiffany (TIF) and Five Below (FIVE), we'll get the latest on retail from the low end to the high end.
Also this week, we'll get the latest snapshot on manufacturing activity via the October durable-orders report, as well as the Federal Reserve Beige Book for the same month. We'll also get an idea as to how consumers are viewing the "fiscal cliff" when with personal income and spending data for October. Lastly, as things get back to normal in Washington, look for more on the "fiscal cliff" itself.
Here's a more granular look at what investors should be watching and listening to over the next five trading days.
Economic Events This Week
- Durable Orders (October) -- Tuesday, Nov. 27
- Case Shiller -- 20 City Index (September) -- Tuesday, Nov. 27
- Consumer Confidence (November) -- Tuesday, Nov. 27
- FHFA Housing Price Index (September) -- Tuesday, Nov. 27
- MBA Mortgage Index (Weekly) -- Wednesday, Nov. 28
- New Home Sales (October) -- Wednesday, Nov. 28
- Fed's Beige Book (October) -- Wednesday, Nov. 28
- Initial & Continuing Jobless Claims (Weekly) -- Thursday, Nov. 29
- GDP -- Second Estimate (3Q 2012) -- Thursday, Nov. 29
- Pending Home Sales (October) -- Thursday, Nov. 29
- Personal Income & Spending (October) -- Friday, Nov. 30
- Chicago PMI (November) -- Friday, Nov. 30
Corporate Earnings This Week
- Analog Devices (ADI) -- Tuesday, Nov. 27
- ADT (ADT) -- Tuesday, Nov. 27
- Green Mountain Coffee (GMCR) -- Tuesday, Nov. 27
- Ralcorp (RAH) -- Tuesday, Nov. 27
- American Eagle Outfitters (AEO) – Wednesday, Nov. 28
- Ann Taylor -- Wednesday, Nov. 28
- Coldwater Creek (CWTR) -- Wednesday, Nov. 28
- Express (EXPR) -- Wednesday, Nov. 28
- Guess? (GES) -- Wednesday, Nov. 28
- SemiLEDs (LEDS) -- Wednesday, Nov. 28
- Movado (MOV) -- Wednesday, Nov. 28
- New York & Co. (NWY) -- Wednesday, Nov. 28
- rue21 (RUE) -- Wednesday, Nov. 28
- TiVo (TIVO) -- Wednesday, Nov. 28
- Aeropostale (ARO) -- Thursday, Nov. 29
- Avago Technologies (AVGO) -- Thursday, Nov. 29
- Barnes & Noble (BKS) -- Thursday, Nov. 29
- Five Below -- Thursday, Nov. 29
- Kroger (KR) -- Thursday, Nov. 29
- La-Z-Boy (LZB) -- Thursday, Nov. 29
- OmniVision (OVTI) -- Thursday, Nov. 29
- Pall (PLL) -- Thursday, Nov. 29
- Pacific Sunwear (PSUN) -- Thursday, Nov. 29
- Royal Bank of Canada (RY) -- Thursday, Nov. 29
- Tiffany -- Thursday, Nov. 29
- Ulta Salon -- Thursday, Nov. 29
- Zumiez (ZUMZ) -- Thursday, Nov. 29
- Genesco (GCO) -- Friday, Nov. 30
- Johnson Outdoors (JOUT) -- Friday, Nov. 30
- United Natural Foods (UNFI) -- Friday, Nov. 30
Upcoming Company and Investor Conferences
- UBS Global Real Estate Conference, Nov. 27-28
- Credit Suisse 2012 Aerospace & Defense Conference, Nov. 28-29
- Jefferies 2012 Global Energy Conference, Nov. 28-29
- J.P. Morgan SMid Cap Conference, Nov. 28-29
- UBS 40th Annual Global Media and Communications Conference, Dec. 3-5