Just by looking at the title, you might think of Invbots.com is suggesting you on some best deals happening on Amazon or anywhere else similar. Unexpectedly, we're not planning to do so. Apart from searching and buying some great stocks like Amazon or Target at discount to save your money, have you ever think of being also able to find the best Black Friday deals in the stock market in 2020?
What is Black Friday?
Black Friday is the day after Thanksgiving Day, which is also one of the biggest spending days in the United States. Black Friday is important to many retailers and many of them have long relied on that day to boost sales.
How Black Friday impact stock market?
Black Friday Sales has a direct impact on the earnings of those retailers. For investors, traditionally, they would look at those sale figures to assess the consumer confidence and the growth of overall economy. In this year, however, the widespread of Coronavirus and lockdown restrictions wrecked the US and global economy significantly. Many people got unemployed. And the timing and sizing of relief package still remains uncertain. Under such uncertainties, people may be more unwilling to spend. Therefore, this year's Black Friday event has become a more important indicator of economy recovery in 2020.
What can we do in stock market?
We collected some names, which may be benefitted from the big sale, from ecommerce to transportation industry, and conducted an analysis based on the 5- day price movement before and after the event for the past 20 years. We will highlight some points in the following. If you want to know more, please refer to the figures below and leave your comments.
In our research, the return of most ecommerce players have a higher chance (over ~80%) to go up 5 days before Black Friday. Besides, Macy's (M.US), the department store with offline location, has a higher probability to surge before the event. Macy's has risen before the holiday consecutively since 2012. Interestingly, Macy's did surge about 15.3 % regardless of the fear of Covid-19 last night (2020-11-23).
However, the winning ratio after the event is generally lower than that before the event as well as average return.
Another interesting observation from the charts (Fig.1 and Fig.2) is in case the stock price goes up(down) before black Friday, it is likely to go down(up) after the event.
Be careful: the past performance of the stock does not guarantee the return in the future. Also, the Covid-19 pandemic has altered people’s spending pattern. Many offline shoppers have been forced to buy online. This change may favor online business over offline business. So, before making the decision, you are advised to do your own research before purchasing any security.
We're, technically still, a few days away from Black Friday. You still have time to prepare, research and position for your own “stocks”.
Fig.1 Stocks related to Black Friday
Fig.2 5-day return before Black Friday (%)
Fig.3 5-day return after Black Friday (%)
