The Capitalist Investor - Episode 155

Despite warning signs, Black Friday and Cyber Monday sales still break records.

The group discusses Black Friday shopping and whether it is bigger than Cyber Monday. They mention that while the sales were up when inflation is taken into account, there was no real progress made. The speakers discuss the market and Black Friday and mention that the rail strike and protests in China are having negative impacts on the economy.

The speakers discuss the possibility of an upcoming recession, citing several indicators that suggest it may be on the horizon. These include the recent inversion of the yield curve, the decreasing price of oil, and banks’ unwillingness to loan money. They also note that the White House has started to take steps to prepare for a recession, such as replenishing the oil reserves.

Are Black Friday and Cyber Monday sales, and whether or not they are indicative of a strong economy? The group discusses how businesses and employees are impacted by a weak economy, and how the recent sales numbers may not be as strong as they seem.

The Market This Week: A Look at Black Friday and Earnings Season    0:01:51

The Impact of Economic Indicators on the Federal Reserve’s Decision-making    0:03:31

The Impact of the Resilient Consumer on Businesses    0:05:28

The Impact of Black Friday and Cyber Monday on the Economy    0:07:29

The Impact of Economic Uncertainty on the Stock Market    0:10:20

The Impact of High Consumer Debt on the Economy    0:12:34

The Impact of the Railroad Strikes on the Stock Market    0:13:58

The Impact of a Potential Railroad Strike on the U.S. Economy    0:15:27

The Impact of China Lockdowns on the Stock Market    0:23:38

Apple and Twitter’s Feud Could Impact the Stock Market    0:25:15

Apple and Tesla’s Feud: Why Elon Musk is Picking a Fight    0:28:56

Recent Holiday Sales

All you see in the headlines right now is how strong holiday sales were and how the consumer is still very strong because of that. But is that really the case? Compared to last year, Cyber Monday sales saw over $11B in sales, a 6% increase over last year. Online sales on Black Friday saw over $9B in sales, close to a 25% increase over last year.

What does that really tell you about the American consumer? Is the American consumer strong, or is this the last credit card debt push before things get worse in Q1 & Q2 of next year? Also, just because the top-line sales numbers are larger doesn’t actually mean the companies are making more money. When you adjust for inflation and the costs of goods & services in the economy, many companies are actually getting compressed on their margins. We highlight where we think the economy & stock market goes from here as we digest all of these numbers and signs.

Railroad Strikes & China Lockdowns

Top of the headlines this week involve lockdowns over in China with their zero-covid policy & rail-road strikes over here in the United States. Both of these could impact the economy, stock market, and also the supply chain. We live in a global supply chain and when China is completely shut down, that impacts the entire world. Apple is the largest company in the world with much of their supply being made in China. Combine that with the potential for China & Taiwan to escalate, the supply chain could greatly be impacted.

On top of that uncertainty, there’s a lot going on with Railroads again in the United States. Unions are demanding more money and more paid sick days. If there aren’t workers on the railway, goods and energy commodities won’t make it to their final destinations. Not only is this an economic issue, but this is also a national security issue. What’s going to happen with rail roads and how could it be fixed in 2023 whether or not a deal gets done?

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