Holiday Season Off to a Great Start

The nation’s biggest spending season is underway and initial numbers indicate that this year will be huge. People are as enamored as ever with the discounts coming their way from traditional retailers like Macy’s M, online retailers like Amazon AMZN, eBay EBAY and so on, and those retailers like Walmart WMT that are leveraging their strength (physical presence) to make the most of buy online and pick up at store models.

“The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend," says the National Retail Federation’s (NRF) Chief Economist Jack Kleinhenz.

This is borne out by the numbers presented by Adobe ADBE Analytics, which notes an 8.5% increase in average online order values to $146 on Friday, driven by increased spending on big-ticket items like appliances, furniture and bulkier electronics.

And more people are doing more of their shopping on their devices ("click-and-collect" orders jumped 73% from Thanksgiving to Black Friday), particularly their phones (who would have thought, just a few years back?) considering the limitations of screen real estate. But it turns out that convenience counts more than most things because this was the first year that smartphones generated $2 billion+ in sales with mobile devices accounting for 33.5% of ecommerce sales (29.1% just last year).

And once the real job of selection is out of the way, what could be better than moving around, soaking in the holiday mood and stopping by a coffee shop or eatery while you’re at it.

This year’s favorites were laptops and streaming devices such as Roku, Chromecast and Amazon Fire TV. Top selling video games were Red Dead Redemption 2, Let's Go Pikachu and God of War.

Overall, it was a very big day grossing $6.22 billion in online sales, up 23.6% from a year ago and setting a new high, eclipsing the $3.7 billion on Thanksgiving Day, which was also up 28%.

Adobe is expecting Cyber Monday sales online to set a new record of $7.8 billion, up 17.6% percent from last year.

The NRF expects holiday retail sales in November and December — excluding automobiles, gasoline and restaurants — to increase 4.3-4.8% this year and generate $717.45-$720.89 billion. This comes off a very strong years in 2017 when holiday sales grew 5.3% to $687.87 billion, the largest increase since the 5.2% jump in 2010, which came off a big recession.

So the stage is set, let’s see where we go from here.

But don’t go away; there’s no great holiday without a great income. So check out the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Rank #1 stocks represent the top 5% of the stocks in the Zacks coverage universe and is based on a proprietary quantitative model that uses trends in earnings estimate revisions and EPS surprises.

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