Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Investors must still be getting their bearings after the long holiday weekend: Stocks opened little changed this morning, with the S&P 500 and the narrower, price-weighted Dow Jones Industrial Average (^DJI 1.18%) down 0.10% and 0.26%, respectively, at 10:10 a.m. EST.
Over the past couple of weeks, I've highlighted the fact that retailers were planning for one of the most cutthroat Thanksgiving weekends in recent years. Dow component Wal-Mart Stores (WMT 0.18%), for example, began matching select Black Friday offers from Best Buy, Target and Toys "R" Us -- one week early. However, the numbers are coming in, and despite all the promotions, offers, and early opening hours, it now appears that retailers were unable to coax a higher aggregate spend out of shoppers. Still, one crafty competitor, Amazon.com (AMZN 0.81%), pulled off a massive publicity coup over the weekend (more on this later).
The National Retail Federation, the industry's principal trade group, now estimates that total spending over the Thanksgiving weekend fell 2.7% compared to last year, to $57.4 billion (note that, in inflation-adjusted terms, the drop is closer to 4%). Retailers did manage to pull in more shoppers, to the tune of 141 million (up 1.4%), but that did not compensate for a 4% decline in average spend to $404 from $427. That suggests that factors such as Obamacare and another potential budget standoff may be weighing on consumers.
Online shopping remains a growth area, particularly since many bricks-and-mortar retailers were offering the same deals online as in-store. Tablets are also fueling this growth, as the format is more convenient for browsing and shopping than smartphones; according to IBM, tablets accounted for 16.5% of purchases on Thanksgiving day against just 9% for smartphones. Online sales accounted for 44% of the weekend total, up from 41% last year and less than a quarter in 2006.
Thanksgiving weekend may be in the books, but the retail wars are far from over -- this is Cyber Monday, after all. Amazon.com has set itself up nicely on that front, with a huge publicity coup that was carefully orchestrated over the weekend. Appearing on 60 Minutes yesterday evening, Amazon CEO Jeff Bezos announced that the e-commerce juggernaut is developing unmanned aerial drones to deliver packages. While he dampened expectations by putting a four- to five-year timeframe on the program -- christened Prime Air -- he went on to say that "we'll be ready to enter commercial operations as soon as the necessary [FAA] rules are in place."
Given the amount of buzz the announcement is generating this morning, it could give a lift to Amazon's sales today -- even if the drones remain grounded for some time yet.
