Green Taxi

I wrote the note below yesterday morning.  This was before the Dubai World collapse shocked the world markets the last 36 hours, dropping world markets 3-6% with the US markets essentially closed.  This Dubai situation could easily overshadow Black Friday talk.

Black Friday and Cyber Monday always drive market direction and sentiment the week following Thanksgiving.  I am expecting a big week ahead.

Consumers are playing a balancing act right now.  The market rally has expectations high and confidence filling people’s wallets, but most people are still in a lot of debt, struggling with a mortgage, or have just lost a job.

Thus, people still have the desire to shop.  The recession has not hit hard enough yet to train people not to shop.  However, people are focusing more and more on how to shop economically and to find the cheapest merchandise out there.

I expect that we see a large turnout of shoppers for Black Friday and Cyber Monday than normal, even if that means weaker sales over the rest of the shopping season.

On the retailer side, we have seen how shrinking competition has improved the remaining companies numbers.  Well, this will only multiply on Black Friday and Cyber Monday.

With CompUSA gone, Best Buy will continue to dominate digital electronics sales.  These businesses will be able to report record numbers merely because they have twice as many shoppers in their stores as last year.

From all of this, I think all we will be reading next week will be about how the “American Consumer is Back” and how the recession is over.  Just a hunch, but I can feel the over-hyped euphoria in the air already.

*image source: wordpress.com

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