Black Friday & Cyber Monday Impact On The Stock Market
Black Friday is one of the most crucial days in the retail industry for vendors across the world. For wholesale stores, Black Friday is when most of the annual profits are made up. The name “Black Friday” comes from black inc, which is what accountants use to write profits with.
Cyber Monday is a newer date, started by a a team of online marketers. Cyber Monday was created for online retailers to experience the sales boost that Black Friday gives to brick-and-mortar stores. Cyber Monday was not as popular as Black Friday to start with, in 2005 only 50% of online retailers participated. As time has passed, it is more common for a retailer to partake in Cyber Monday than not.
Cyber Monday 2017 was the largest online sales day in history. For 2018, retailers are expecting even higher sales numbers. For companies like Amazon, Cyber Monday and Black Friday sales are expected to increase the share price.
Black Friday Stock Market Impact
Some analysts, like Mark Hulbert (from Market Watch) has said that there is no correlation between Black Friday and Cyber Monday sales and Q4 earnings reports. After looking at years of market data, it is seen that Black Friday and Cyber Monday events determine the outlook of retail stocks for the year. If a company reaches its revenue targets for Black Friday then it is an indication on that the holiday season will be profitable. The stock of that company would make gains as investor confidence rises.
However, if a company misses its Black Friday targets then confidence in Q4 revenues will go down. Meaning that a company can be positively impacted and negatively impacted by the events of Cyber Monday and Black Friday.
Many investors and analysts agree with Hulbert, the general consensus is that Black Friday and Cyber Monday only give a company short-term potential for gains. The short-term gains associated with Black Friday can be significant, but the long-term impact is yet to be seen.