A not-so-black Black Friday
November 26, 2024
Topic of the week:
By Sara López Vázquez
Black Friday, as we know it today, is the day that kicks off the Christmas shopping season. If we focus on the denomination of such a day, and according to the criteria that semiotics establishes on the communication capacity of language, we could talk about the denotative and connotative part of the term.
From the denotative point of view, the expression only provides a description of what could be any Friday, a preamble to the weekend. However, the adjective “black” has an obvious connotative charge. Why? Because the word “black” used as an adjective brings a series of very specific references. Black is the total absence of light, black is a negative or dangerous event, a black hole, in a metaphorical sense, is something that absorbs everything, black implies seriousness, mourning?
To understand this negative connotation, we must go back to the most widespread version of the origin of the coining of the term. It was in 1961 when a group of police officers in the city of Philadelphia (USA), used it to describe the chaos and congestion that occurred in the streets of the city the day after Thanksgiving, characterized by heavy traffic, crowded streets and crowds of shoppers.
How did the name of a not exactly positive event that was systematically repeated after an important date turn into a massive shopping event that opens the period of unexpected Christmas happiness? It must have been, no doubt, a communication campaign that chose to appropriate a well-known expression for its use stripped of its negative connotation. The globalization of consumer habits in the most developed societies brought this event to Spain in 2012.
In this way, Black Friday has ended up becoming a thermometer of the economy, allowing the following variables to be measured:
- Consumption expectations: Black Friday is a key indicator of how consumers are willing to spend during the holiday shopping season. An increase in sales during this day can generate optimism in the markets.
- Retail results: Many retailers rely on Black Friday for a large percentage of their annual sales.
- Large company results: If sales exceed expectations, company stocks may rise, which could boost overall stock indices.
- Consumer sentiment: Black Friday sales can also be a reflection of the overall state of the economy and consumer confidence. If sales are low or fall short of expectations, this could raise concerns about future spending and lead to a drop in the markets.
All these apparent advantages cannot make us forget the negative effect of the massive and irresponsible consumption to which the celebration of this event impels us. The generation of fictitious needs, based on the criterion of opportunity that the price drop implies, leads the consumer to an unthinking consumption with the obvious consequences that this has on the most vulnerable family economies. Similarly, it puts pressure on small businesses that cannot compete with big discounts, causes stress and anxiety in consumers due to the pressure to take advantage of limited offers, promotes the production of low-quality goods in order to offer lower prices and perpetuates a cycle of consumerism that is detrimental to the planet and society in general.
For all these reasons, we should consider actions to be taken to correct these unsustainable consumption patterns involved in the celebration of this event. Could we consider transforming the event? What would “impact shopping” entail? Impact purchases would be those acquisitions that not only seek to satisfy an economic need, but also generate a positive social, environmental or cultural benefit, prioritizing ethical and sustainable criteria in their consumption decisions.
Green Friday, whose raison d’être is to promote responsible and conscious consumption in the face of the unbridled euphoria represented by Black Friday, could be considered an appropriate and beneficial alternative, both for the consumer and for the environment.
Venus de los Trapos, Michelangelo Pistoletto
After the consolidation of the rises brought about by Donald Trump’s resounding victory, as expected, the market has entered a more sideways phase in which weeks of declines alternate with weeks of rises. We are approaching the last month of the year and a semi-holiday week begins in the United States that could bring some calm to the stock markets, before the final (bullish?) move. The US indices, S&P 500 and Nasdaq 100, recorded gains of close to 1.75%, while in the old continent the movements were erratic, with the stock markets going up and down and negligible variations at the weekly close.
After several weeks of rises in government bond yields, opportunistic purchases in the last few days have led to a slight drop in interest rates. Thus, the 10-year Treasury yield fell by 3 bps to 4.41%. In Europe, corrections were somewhat larger, perhaps in anticipation of the fact that the ECB still has work to do (the macroeconomic data confirm this). The Bund dropped 10 bps and the Bond another 8 bps to end at 2.25% and 2.97% respectively.
Instability in Israel and Ukraine, doubts as to what will happen by the time Trump takes office and future interest rate cuts, relaunched the gold price back to USD/Oz 2,737.20, up for the week by 6.50%. Brent also rose notably to 74.63 USD/b, in this case, low inventory levels in the US helped to amplify the magnitude of the movement.
With regard to the macroeconomy, we would like to highlight two points in Europe: (i) inflation came in at expected levels, 2% for the headline index and 2.7% for the core figure, therefore, it seems to be under control and will allow the ECB to continue lowering interest rates, and (ii) PMI data came in below estimates, with the services figure coming in even below the 50 level, indicating contraction, providing more reasons for future rate cuts by an ECB that additionally, in its latest financial stability report, highlighted the vulnerability of the European economy due to the highly volatile environment, fragile economic growth, high asset valuations and fiscal weakness in some of the major economies.
In the US, on the other hand, the PMIs exceeded forecasts both at the services level, which rose notably to 57 from the previous figure of 55 and the forecast of 55.2, and at the manufacturing level, which came in at 48.8, continuing the improvement seen for several months. On the other hand, both the University of Michigan’s confidence data and the Philadelphia Fed’s manufacturing index came in below expectations. Another week of mixed data, but supporting a solid US economy.
Throughout this week we will know the PMIs in China, the CPI (provisional data) for November in Europe and finally in the U.S. will be published the consumer confidence of The Conference Board, the GDP (provisional data) for the third quarter, the minutes of the last meeting of the FED and the PCE that could anticipate the future evolution of inflation in the coming months. Let’s remember that Thursday is a holiday in the US and on Friday there will only be half a trading session, which will leave the European markets with less liquidity.
The phrase:
And we say goodbye with the following quote from Robert Lee Frost American poet, considered one of the founders of modern poetry in his country for expressing, with philosophical simplicity and sentimental depth, the life and emotions of the rural New England human being, “Everything I have learned in life I can sum up in two words: Everything happens.”
Summary of the performance of major financial assets (11/25/2024)
This report does not provide personalized financial advice. It has been prepared irrespective of the particular circumstances and financial objectives of the persons receiving it.
This document has been prepared by Portocolom Agencia de Valores S.A. for the purpose of providing general information as of the date of issuance of the report and is subject to change without notice. Portocolom Agencia de Valores S.A. assumes no obligation to communicate such changes or to update the contents of this document. Neither this document nor its contents constitute an offer, invitation or solicitation to purchase or subscribe for securities or other instruments or to make or cancel investments, nor may they form the basis of any contract, commitment or decision of any kind.
The information contained herein has been obtained from public sources believed to be reliable and, although reasonable steps have been taken to ensure that the information contained herein is neither uncertain nor unequivocal at the time of publication, we do not represent that it is accurate and complete and it should not be relied upon as if it were. Portocolom Agencia de Valores S.A. assumes no liability for any loss, direct or indirect, that may result from the use of the information provided in this report. Past performance of variables may not be a good indicator of future performance.