PowerTrend Brief: Cyber Monday and Digesting Hurricane Sandy in the Data; Launching PowerTalk

During the four-day Black Friday shopping weekend, American consumers traveled from mall to strip mall, sought out deals, scanned bar codes, comparison-shopped, surfed the Internet and clicked away at what many call “retail therapy.” Many of the biggest retailers, including Wal-Mart, Target, Best Buy and Toys R Us, opened on Thanksgiving evening, while stores across the landscape rolled out their door-buster deals and deep discounts to lure consumers into parting with their dollars.

Did it work?

BIGinsight found that 247 million shoppers (including repeat trips) visited stores and websites during Black Friday weekend, up from 226 million last year, and in aggregate spent $59.1 billion. According to its survey findings, BIGinsight calculated the average holiday shopper spent $423 this weekend, up from $398 last year.

Blurring the line between in-store comparison shopping and stay-at-home shopping via the Internet, IBM reported that the number of consumers using their mobile devices to make purchases on Black Friday this year increased by nearly two-thirds from 2011. According to IBM, Apple’s iPad made up nearly 10% of online shopping traffic on Black Friday this year, while the iPhone brought in almost 9% and Google-powered Android devices accounted for 5.5%. Aside from making direct purchases, consumers were using their iPhones, iPads and Android devices to compare prices to get the best deals. That meant using apps such as BuyVia, Red Laser, Amazon Price Check, Decide and ShopSavvy, among others.

Mobile Commerce and Mobile Payments Explode

Online retailers had their biggest day ever on Cyber Monday as holiday shoppers drove sales up 30% compared to the same day last year, reported IBM Smarter Commerce, which tracks Web sales at 500 top online retailers. Leading the charge were online sales for department stores, which, according to IBM, were up 43% compared to year-ago levels. Overall, mobile sales were up 96% compared to 2011, with the iPad taking the top spot as it drove more than 7% of online shopping. Cementing the use of mobile devices during the weekend, eBay’s (EBAY) PayPal service revealed that it saw nearly a tripling in mobile-payment volume on Cyber Monday.

Launching PowerTalk

What makes that situation all the more interesting is that data points to the intersection of two PowerTrends — Always On, Always Connected and Cashless Consumption. I’ll have more on Cashless Consumption later this week when I share my in-depth conversation on mobile commerce with Matt Jacobson of Acta Wireless. That conversation kicks off the start of my PowerTalk series of conversations with chief executive officers (CEOs) and chief operating officers (COOs) of public and private companies, as well as other key subject matter experts. In the mobile commerce PowerTalk, we talk about the transition from cash and credit card to paying with mobile devices, such as GoogleWallet or the mobile carrier Isis Mobile, and how retailers such as Best Buy (BBY), Sears (SHLD), Target (TGT) and Walmart (WMT) are responding. I will cover all that and much more, so be on the lookout later this week and early next week for an email about how to listen to that conversation; it’s the kind that hedge fund and mutual fund manager pay big bucks to get.

Closing the Books on November; Hurricane Sandy’s Effect on the Data

Despite some dips last week and renewed headlines over the “fiscal cliff,” the overall stock market edged up with the Dow Jones Industrial Average rising 0.1%, the S&P 500 climbing 0.5% and the technology-heavy Nasdaq jumping 1.5%. Last week also closed the books on November and that means we have one month left to go to close our 4Q 2012.

That also means it’s time to check in on the consensus expectations for the S&P 500’s operating earnings for the current quarter. Surprisingly, the consensus figure of $26.50 per share is unchanged during the last 30 days. For the last 30 days, we’ve experienced Hurricane Sandy, seen a rebound in layoffs and watched more companies cut forward guidance than we have in some time.

Last week, we started to see the distortion that Hurricane Sandy will have on the economic data we will be getting this week. On an aggregate basis, October New Home Sales fell 0.3%. Sifting through the data, however, shows that the drop in October new home sales reflected Hurricane Sandy-related declines in the Northeast and South. With the pickup in economic data ahead this week, it means we’ll have to dig a little deeper to interpret the truer meaning in the data.

Will it be easy? Probably not, since we also will be dealing with the growing sense of “fiscal cliff” concern. As I’ve noted during the last few weeks, companies and municipalities — such as Hanes Brands (HBI), Northrop Grumman (NOC) and Groupon (GRPN) competitor Living Social, to name a few, and municipalities like Detroit and Anchorage — have started to trim respective headcounts.

Those are but a handful of entities making such announcements during the last few weeks, and that reality, as well as the impact of Hurricane Sandy, will be felt in Friday’s November Employment Report. Also in the coming days, we’ll get the latest manufacturing data as it pertains to not only the United States, but also the euro zone and China. That situation means watching the industrial stocks such as Caterpillar (CAT), Cummins Engine (CMI), Paccar (PCAR) and Emerson Electric (EMR), among others. Following Yum! Brands’ (YUM) guidance last week that its same-store sales in China for 4Q 2012 are expected to be down 4%, many will be scrutinizing the HSBC report on China’s manufacturing activity this week.

Those two sets of reports — manufacturing activity and domestic employment — will bookend the week and, in between, we can expect more political theater as it pertains to Washington cutting a workable deal to avoid the “fiscal cliff.” As I have said before, companies and consumers will hope for the best but have to start preparing for the worst. To me, this situation indicates that even though the 2012 holiday shopping season started off on a strong note, there are still more than three weeks to go before the Christmas holiday. Remember that last year, holiday shopping started strong and faded as we got closer to Christmas — and that pattern occurred without any “fiscal cliff” to worry about.

Sincerely,

Chris Versace
Editor, PowerTrend Brief

Here’s a more granular look at what investors should be watching and listening to during the next five trading days, as well as a list of companies reporting their quarterly results:

Monday, Dec. 3
HSBC China Manufacturing PMI (November)
Markit Eurozone Manufacturing PMI (November)
Markit U.S. Manufacturing PMI (November)
ISM Manufacturing Index (November)
Construction Spending (October)
Auto & Truck Sales (November)

Tuesday, Dec. 4
AutoZone Inc. (AZO)
Big Lots (BIG)
Casella Waste Systems (CWST)
Mattress Firm Holding (MFRM)
Pandora Media (P)
Pep Boys (PBY)
Vitesse Semiconductor (VTSS)

Wednesday, Dec. 5
MBA Mortgage Index (Weekly)
ADP Employment Report (November)
Factory Orders (October)
ISM Services Index (November)
Brown Forman Corp. (BF.A)
Finisar Corp. (FNSR)
Resource America (REXI)
Science Applications International (SAI)
Sigma Designs (SIGM)
The Toro Co. (TTC)
Vera Bradley, Inc. (VRA)

Thursday, Dec. 6
Challenger Job Cuts Report (November)
Initial & Continuing Jobless Claims (Weekly)
Analogic Corp. (ALOG)
Canadian Imperial Bank (CM)
The Cooper Companies (COO)
Esterline Technologies (ESL)
H&R Block (HRB)
Lululemon Athletica (LULU)
Men’s Wearhouse (MW)
Palo Alto Networks (PANW)
Smithfield Foods (SFD)
Smith & Wesson Holding Corp. (SWHC)
TD Bank Financial (TD)

Friday, Dec. 7
Non-farm Payrolls & Unemployment Rate (November)
University of Michigan Sentiment Index (December)
Consumer Credit (October)
ALCO Stores (ALCS)
KMG Chemicals (KMG)
Lakeland Industries (LAKE)