The Thanksgiving holiday is fast approaching on 24 November. Today, we’ll predict some of the stocks that might be affected as two of the world’s largest economies gear up for a terrific turkey treat! After that, we’ll outline this week’s hottest trading events for your calendar.
Tis the season to shop!
If you’re not American or Canadian, you’d be forgiven for not fully understanding the significance of the Thanksgiving holiday. Many citizens see this as the primary celebration of the year, eclipsing even Christmas.
Economically, Thanksgiving is an important date in its own right — mainly for the food industry, or anyone that sells turkeys. But Thanksgiving precedes what has become one of the biggest retail days of the year — Black Friday. That event itself precedes Cyber Monday.
And so the shopping season begins! These two events are largely seen as an indicator of the coming season. If spending is high on these days, it will likely continue throughout the run-up to Christmas and New Year. Never has that been more relevant now, as we enter a global economic slowdown.
According to the National Retail Federation (NRF),last year an estimated 186.4m people shopped in stores or online during the period from Thanksgiving through to Cyber Monday.
Top stocks to keep a thankful eye on
Here are our picks and why we chose them. It’s all about the inventories! Remember, Thanksgiving is a U.S. Stock Market Holiday, during which the U.S. Stock Market, including the Nasdaq and New York Stock Exchange (NYSE), is closed. The following day, the stock market hours are also affected, with an early closing at 1 pm on Black Friday.
#1 Nike (NKE)
Nike’s inventories recently hit 9.66 bn. That’s around 1–2bn more than the company has ever had, as you can see on this chart.
Nike needs to offload this inventory and recent investor calls have suggested that the company may be planning to shift a decent chunk of it through massive discounts over the holiday period. Likely boosting sales and profits in the process.
Add that to the current relatively low price of Nike stock (-36% YTD) and investors suddenly have a pretty nice situation on their hands.
#2 Nvidia (NVDA)
Same story, different industry! Leading computer hardware maker, Nvidia has amassed a huge inventory of GPUs of late and likely needs to shift it, fast. It currently has 3.89bn in stock, marking its highest ever stock level
Just like Nike, this huge stock level and likely holiday discounts to shift it, twins with a stock price that should look very inviting for traders.
#3 Target (TGT)
The US retail giant that sells everything from hammers to homeware is gearing up for the busiest time of the year by — you guessed it — stockpiling a huge amount of inventory. Over 15bn of it to be precise.
As you can see from the chart above, this year has bucked the trend in terms of inventory growth and Target are going to need to move a lot of it on. The best way to do that? You get where we’re going — DISCOUNTS! Expect some big ones and some big profits!
Twinning is winning and, again, in the case of Target, a desperate need to clear a high inventory is combined with a low stock price (-25% YTD), which should look very inviting for investors!
Now, let’s hear from you!
What will you be trading this upcoming Thanksgiving weekend? Do you have any other top stock picks? Tweet us at @_contentworks.
Top fundamental events week commencing 14.11.22
Here are all of the main events coming up in what looks like a pretty busy week for the markets.
No major events are planned.
● JPY — GDP Growth Annualised Prel (Q3)
● GBP — Employment Change (AUG); Unemployment Rate (SEP)
● EUR — GDP Growth Rate QoQ 2nd Est (Q3); GDP Growth Rate YoY 2nd Est (Q3)
● USD — PPI MoM (OCT)
● GBP — Core Inflation Rate YoY (OCT); Inflation Rate YoY (OCT)
● CAD — Core Inflation Rate MoM (OCT); Core Inflation Rate YoY (OCT)
● USD — Retail Sales MoM (OCT)
● AUD — Employment Change (OCT); Unemployment Rate (OCT)
● EUR — Core Inflation Rate YoY Final (OCT)
● GBP — UK Autumn Statement
● JPY — Inflation Rate YoY (OCT)
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The Contentworks team