Wall Street continues to hit new highs and, while we lag a little, we remain in positive territory for the year so far. True, we are below the peaks achieved in the summer, though even those were not as high as those reached last year. If truth be told, the benchmark index has made comparatively little progress over the past two decades.
There is not a lot happening on either the company or the economic front at present, if you exclude pronouncements from both the US Federal Reserve and the European Central Bank. But Black Friday is upon us. You would be hard pressed to miss this seemingly gargantuan retail bonanza, given the amount of advertising promoting special offers. Which Magazine, however, warns that the majority of these so-called bargains are not all they are cracked up to be.
Like so many things, Black Friday is an American import. The last Thursday in November is Thanksgiving Day in the US and a public holiday. Many people take the Friday off as well and shops have long enticed those with time on their hands to carry out a bit of early Christmas shopping by offering goods at discounted prices. Now it happens everywhere, even though Thursday is not a holiday here. And it’s not just the purveyors of goods that are jumping on the bandwagon, with hotels and taxi firms joining in.
Talking of Christmas, December will be with us soon. Investors will doubtless be wondering if we will experience the seasonal Santa rally in markets. It doesn’t always take place. Last year, for example, the FTSE 100 Share Index actually fell during December. Mind you, we were all feeling a little nervous as 2018 drew to a close, not that the problems believed to surround us turned out to be quite as damaging as feared. However, evidence shows that markets are more likely to rise than to fall in December.
This is not necessarily a consequence of traders being full of Christmas spirit. The most likely explanation is that many investment funds operate to a calendar year end. Fund managers will be balancing the books and investing surplus cash. Quite why this seems to translate into an overall market rise is not that clear, except that managers are meant to invest, not leave their clients’ money languishing on the sidelines. Whatever the reason, let us hope this year behaves as expected. Perhaps we might even have a white Christmas.