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2023-11-21 07:00 by Karl Denninger
in Market Musings , 293 references Ignore this thread
It's Huckster Season!
[Comments enabled]

Otherwise known as CHRISTmas.

I had to chuckle at this one from Xthe hubris of thinking that lifting lots of mass off the surface suddenly makes interplanetary life for humans (and other living things) reasonable is beyond crazy.  I've gone through the reasons why this is silliness in the past so long as we're using chemical reaction-mass rockets -- and there's no indication that anyone is about to breach that scientific barrier.

Of course the "consumer orgy" known as Black Friday is imminent as well; the flyers are already showing up and so is the promotion on anything that you might use as an "App" or if you've given some merchant your email address or your cell number.

The next six weeks, more or less, are usually pretty good for equities.  The remaining question mark in this year is whether or not people have room on the plastic for another trip to either their Amazon account or the local merchants.  I found it interesting that the recent MARTS report was quite tepid all things considered; the entire report on a "seasonal adjusted basis" was down 0.1% and, quite-notably, retail sales were only up 1.6% from last year's level, while even by the CPI they don't try to claim inflation was less than that.  Thus, in inflation-adjusted dollars (that is, in units of things sold) retail trade sales were negative 

An interesting point in the MARTS report is that Grocery and other food and beverage store sales were statistically zero (+0.16%) in change from last October.  Given that we know inflation in food hasn't been zero by any means this is a very solid indication that inflation is hitting people's food consumption budgets and they're buying less.  While food and beverages are often thought of as "non-discretionary" that's only true at the edges; most people buy an awful lot of discretionary food and beverage items and yet here we are with a statistical zero which, given inflation data, says that unit sales are down materially.  The same is true for furniture and home stores except there we have a roughly 12% annual spend decrease, so it would certainly appear that people are putting off that new sofa or bed, and clothing was statistically flat so it looks like the ripped jeans are being worn for another month as well.

A 10% increase in health and personal care looks to be materially-comprised of pharmaceuticals.  That's rather involuntary most of the time.

And as for driving people to drink, well, perhaps -- that annualized change is 7.7%, which looks a lot like the real inflation rate, so perhaps that is all, of nearly-all, not in more beers but more-expensive beers.  I can believe that.

October is of course a month that doesn't have much other than Halloween in it, which does make for a pretty-good y/o/y comparison basis when it comes to "baseline" consumer trends and is far enough away from Black Friday to evade any sort of realistic "pull forward" type of effect.  The November release (including Black Friday) will be on the 14th of December, so we have a while for the various media folks to tell us how great (or not) the post-Turkey sales might be.

I've received several circulars with "Black Friday" sale prices and 0700 opening hours for stores starting the Monday of Thanksgiving week.  It would appear that there are merchants with either a bit of  "jump the line-ism" or desperation are out there -- but its hard to know which.

I can tell you this from Monday morning -- I went up to BassPro bright and early, 0700.  There was no congestion in the parking lot. There were three customers I saw in the store including myself, two buying firearms-related items (one ogling a gun, one was ogling a scope.)  I saw one thing I wanted at a price that was reasonably-discounted and purchased it -- total spend under $20.  They spammed every person in the area by postal mail with their circular for "early" Black Friday shopping and got exactly nothing in terms of a crowd this morning out of it; all that ink, paper and postage was worth bupkis.

I have often called this silly season for the markets, and even in really bad times (e.g. 2008) that has proved up to be pretty accurate. 

We shall see if its "Santa Claus", as expected, or Sandy Claws this year.