Wall Street eyes subdued open with Black Friday sales in focus

  • Retailers in focus amid Black Friday sales
  • Activision down on likely FTC lawsuit to block Microsoft deal
  • Apple slips, Foxconn China plant sees lower shipments
  • Futures: Dow up 0.11%, S&P flat, Nasdaq off 0.24%

Nov 25 (Reuters) – Wall Street’s main indexes were set for a subdued open on Friday, with investors closely monitoring the major retailers as Black Friday sales began against the backdrop of stubbornly high inflation and worries about a potential recession next year.

US retail stocks, a barometer of consumer confidence as inflation bites, remain under pressure after a lull in October and November sales figures.

Retailers have been forced to offer steep discounts to lure shoppers, threatening their profit margins. In fact, retailers across Europe fear the overall Christmas trading season could be the worst in at least a decade.

Target Corp (TGT.N), Macy’s Inc (MN) and Best Buy Co Inc (BBY.N) have warned of steeper discounts this November and December than in the previous two years. Their shares were mixed in light premarket trading.

Focus will also be on consumer discretionary stocks, a group whose members range from Amazon.com Inc (AMZN.O) to automaker Tesla Inc (TSLA.O) and retailer Target, for greater insight into the extent that consumers are opening their wallets.

An estimated 166.3 million people are planning to shop from Thanksgiving Day through Cyber ​​Monday this year, according to the National Retail Federation.

“It’s a very competitive environment for retail, both price cutting and who’s best positioned for inventory will play a big part in how you do over the season,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“Margins will be squeezed and profits will be lower … the bigger question will be company forecasts for next year and whether investors think this is a reciprocal bottom or the start of a new trend and reduced spending.”

Wall Street’s main indexes have rallied strongly since hitting their early October lows, with the S&P 500 (.SPX) up more than 12% on a boost from a better-than-expected earnings season and more recently on hopes of less aggressive interest rate hikes. by the US Federal Reserve.

Expectations are now of a 63.5% chance that the Fed will increase its key benchmark rate by 50 basis points in December, with the rates peaking in June 2023.

At 08:30 am ET, Dow e-minis were up 38 points, or 0.11%, S&P 500 e-minis were up 1 point, or 0.02%, and Nasdaq 100 e-minis were down 28.5 points, or 0.24%.

Activision Blizzard (ATVI.O) dipped 3.2% on a media report that the US Federal Trade Commission is likely to file an antitrust lawsuit to block Microsoft Corp’s (MSFT.O) $69-billion takeover bid for the video game publisher.

Apple Inc (AAPL.O) slipped 1.1% after news of reduced iPhone shipments in November from a Foxconn plant in China.

US stock markets will remain open for a half session on Friday until 1 pm ET, after being closed on Thursday for Thanksgiving.

Reporting by Ankika Biswas and Shubham Batra in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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