(Justin Vaughn, Editor, Options Trading Report)
Black Friday is known nationwide as a day for gigantic markdowns…but not like these. Stocks, commodities, government bonds yields, oil prices dived on Black Friday after news of a new coronavirus virus variant from South Africa, dubbed Omicron. Concerns and fears of a ‘new’ wave of the new pandemic quickly emerged as markets were ‘thin’ on Friday as investors toyed with news. Most of the ‘important people were off for the Thanksgiving weekend leaving the markets to wobble a bit with buyers and sellers in short supply. Friday, with fewer market participants to take the ‘other side of trades’ and with bad news fresh available, this caused the markets to ‘shoot first’ and ask questions later easing the trough downward. As the U.S. exchanges closed the day, Friday, small caps got walloped the most. The S&P 500 dropped 2.20%, finishing at 4592, while the Dow Jones Industrial Average lost 905 points or 2.5%, to 34899. It was the biggest one-day percentage drop since October 2020. The tech heavy Nasdaq dropped 353 points or 2.20% to 15491. It was the worst Black Friday session on record for all three indexes. The ‘lonely’ Russell 2000 index of smaller companies looked solid at the start of the week, however the index slumped badly at weeks’ end. The index was off 4.15%. ending at 2245.
Black Friday Shopping is back. The pandemic didn’t just change consumer buying habits, it prompted retailers to rethink Black Friday, one of the biggest shopping days of the year. Retailers have moved away from doorbusters, the deeply discounted items available for a limited time that drew hordes to stores on Friday morning. Instead they have been dangling Black Friday deals all month, online and in stores. Some even hosted streaming events on their websites Friday as an alternative to visiting the store. “Customers are shopping differently this year,” said Greg Revelle, Kohl’s Corp.’s chief marketing officer. “We had to alter our Black Friday strategy.” The National Retail Federation expects sales during November and December to rise by a record 8.5% to 10.5% to as much as $859 billion, compared with a year ago in contrast to an average increase of 4.4% over the past five years. The retail federation estimated that a total of 58.1 million people would shop on Saturday and 62.8 million in what has become known as Cyber Monday. Despite some hiccups, robust overall sales point to a happy holiday for most retailers.
Art Market Sizzles…..The Art market is sizzling. The world’s premier auction houses sold more than $2.3 billion worth of art during a two-week sale series in New York that ended Friday, November 19th. Collectors gathered for the first time since early 2019, chasing after high-end art, like never before, and not seen since a few years before the pandemic. Rarely do auction houses sell every single object they have to offer, but Sotheby’s and Christie’s achieved that feat! Collectors splurged on everything from Van Gogh to Banksy to a rare edition of The Constitution (of The United States), sold at a record price. The Series marked the first time arrival of cryptocurrency, as a means of barter. A group of cryptocurrency investors organized as Constitution DAO narrowly lost a bid to win the $43.2 million Constitution after crowdfunding $40 million-plus over a 72-hour span. Christie’s auctioned off nine artworks for at least $25 million. The house crossed that mark 14 times in two weeks. Phillip’s $138 million sale on Wednesday was a record high for the company. Sotheby’s $676 million sale of the collection of real-estate mogul Harry Macklowe and his ex-wife Linda Macklow, represented a record in the 277-year-old company’s history. “People look for places to put their money, and what greater pleasure than in art?” said Mr. Glimcher, a dealer at Pace Gallery. Art Lawyer Thomas Danziger said a better measure of the art market’s depth often can be taken by tracking the results of the houses’ daylong sales of lower-priced goods–and nearly everything sold this time as well: “The art market is truly firing on all cylinders.”
RUMBLINGS ON THE STREET
Matthew Tuttle, FOMO ETF manager, Barron’s “There is a heck of a difference between buying a bond that I know in three years I’m going to get $100 back, guaranteed basically, and buying something that you cannot completely convince me is not going to go to zero, says Mr. Tuttle. “I think the bond guys, for lack of a better word, have FOMO. How do you be a bond manager in this environment?” Tuttle, of course, is referring to the fact that bonds currently pay hardly any interest. “I think (bond) managers are trying to juice returns any way they can,” he adds. Mr. Tuttle suggests the ticker symbol FOMO stands for “fear of missing out.”
Frank Cappelleri, Internet Strategist, Barron’s “It isn’t time to panic, the S&P 500 has built up a cushion the last seven weeks, and a 4% to 5% pull back alone won’t alter its longer-term trend,” says Mr. Cappelleri.
Bill Smead, Smead Capital, Barron’s “Market participants are afraid of going back into Covid lockdowns,” he says. He points out that the pandemic war is ongoing, but people are getting better at coping. “These optimism collapses (are) a good buying opportunity.” It’s an optimist take on Friday’s action, but it’s one that has worked for months.
David Kemmerer, CEO 0f CryptoTrader.Tax, a software provider, Barron’s Crypto can move from wallet to wallet and people may have no idea what their cost basis is,” says Mr. Kemmerer. “The IRS is getting info on who’s investing, but they’re not getting information on how much those investors may have actually made.”
President Joe Biden, on his nomination of Jerome Powell to a second term as Chairman of The Federal Reserve, Barron’s “We need stability and independence.”