Dow Retreats as Consumers Begin $1 Trillion Christmas Shopping Spree

• The Dow, S&P 500, and Nasdaq fell to close out November slightly below all-time highs.
• The Christmas shopping season is here, and consumers are expected to hit a new milestone in holiday purchases: $1 trillion.
• But will a quirk in this year’s calendar punish retail stocks?

The Dow retreated during November’s final trading day, and the stock market prepared to close the month slightly below record highs.

Christmas shopping season is officially in full swing, but a quirk in this year’s calendar could leave retail stocks in a precarious situation.

Dow Edges Below All-Time High

Wall Street’s three major indices took a step back during Friday’s shortened trading session. The Dow Jones Industrial Average slid 72.70 points or 0.26% following the opening bell; the index last traded at 28,091.3.

The S&P 500 declined 6.81 points or 0.22% to 3,146.82. Energy stocks lost 0.6% thanks to a 1.7% drop in the price of oil, while industrials suffered a 0.4% setback.

The tech-heavy Nasdaq dipped 22.56 points or 0.26% to 8,682.61.

Gold traded sideways despite the risk-off mood in stocks, and Treasury bond yields remained virtually unchanged as well.

Stock Market Ignores Bullish Christmas Shopping Estimates

If you’ve felt like the Christmas shopping season begins earlier and earlier each year, you’re not mistaken. US online shoppers spent more than $50 billion before Thanksgiving, and they added an estimated $4.4 billion  on Thursday itself.

Black Friday and Cyber Monday purchases are expected to surge by nearly 20% over 2018 levels. According to Adobe Analytics, online Christmas shopping could account for almost $150 billion  in sales this year.

That doesn’t count purchase made at brick and mortar stores, which could raise overall holiday spending to $1 trillion  for the first time in history.

By all accounts, this should be a banner year for retailers. There’s just one catch. Because Thanksgiving fell so late in November this year, there are six fewer holiday shopping days  than usual.

Adobe anticipates that the compressed calendar could cost online retailers as much as $1 billion  in revenue. But the real losers could be smaller brick and mortar stores. With fewer days until Christmas, consumers may opt for the convenience and speedy shipping options at e-commerce giant Amazon instead of shopping around.

But the shortened shopping season creates challenges for retail giants too. Because stores like Walmart (a Dow Jones component) and Target expect to see greater-than-usual foot traffic, there’s less margin for error on staffing and inventory management.

Add in lingering threats from the trade war – not to mention slowing economic growth – and retail stocks could face headwinds heading into the new year.