Record Cyber Monday Sales Overshadowed by Economic Outlook

An employee uses a forklift truck to move boxes around an Amazon.com Inc. fulfilment center in Koblenz, Germany. (Photographer: Alex Kraus/Bloomberg)
An employee uses a forklift truck to move boxes around an Amazon.com Inc. fulfilment center in Koblenz, Germany. (Photographer: Alex Kraus/Bloomberg)

Shoppers will spend an estimated $7.8 billion on Cyber Monday — a record — boosting a strong holiday shopping season. And Wall Street seems to be mostly shrugging it off.

Even a blockbuster holiday won’t divert the market’s attention from rising interest rates next year and the escalating trade war between the U.S. and China that’s expected to slow global economic growth. U.S. President Donald Trump in September imposed 10 percent tariffs on approximately $200 billion worth of Chinese imports and plans to raise the levy to 25 percent in January, which will drive prices higher.

Fears about a consumer spending slowdown in 2019 outweigh any positive signs of a strong holiday, said Tom Forte, analyst at DA Davidson & Co.

“Many of the tariffs will likely be borne by consumers in the second half of 2019 in the form of higher prices on products,” he said. “Higher interest rates may dampen spending on big-ticket items.”

Companies like Amazon.com Inc., Walmart Inc. and Target Corp. that are fighting to win holiday spending online may not see a substantial payoff in terms of their market value. And some technical fumbles on Black Friday showed that traditional stores are still struggling to accommodate the hoards of internet shoppers. Even with substantial investments in technology, some retail giants including Walmart, Lowe’s Cos. and Kohl’s Corp. confronted glitches and malfunctioning websites on Friday, a sign they aren’t keeping pace with the load of consumers switching to e-commerce.

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SOURCE: Spencer Soper
Bloomberg