Friday Notes

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Holiday shopping season proving to be better than feared
Fri, Dec 19 2008, 14:57 GMT
by UniCredit Research.
UniCredit Group
Fear. Financial market crisis coupled with deep recession, job concerns and rock-bottom sentiment – it is hardly surprising retailers were concerned that this year’s holiday shopping season could be a bust. The weeks before the holidays are, after all, the strongest of the year in terms of sales. This applies to the US even more than to Europe.
Relief. Contrary to all prophecies of doom, however, the holiday shopping season got off to a pretty respectable start. In the US, the number of customers streaming into stores on Black Friday weekend was up strongly (pages 4-7). Unprecedented discounts and the gains in purchasing power on the back of falling energy prices should have helped.
Act of defiance? Retailers in Germany are also satisfied with sales. Moreover, the experience of recent years shows gifts are being purchased later and later. As a result, the holiday shopping season appears to be bucking the crisis. Apparently, consumers want to pamper themselves one more time before things get really ugly (pages 8-9).
Recession. And there is no doubt they will. In the coming year, GDP throughout EMU will contract by 1.3%, the strongest decline in post-war history, while unemployment should increase appreciably again – also in Germany. And the US economy will even contract 1.5% in 2009.
Further topics:
- Weekly Comment: Best Wishes (page 2).
- Oil price: We are lowering our forecast (page 10).
- Data outlook: Sentiment will stay exceptionally low (page 12).
- Market outlook: EUR to stay supported (page 16).
Published on
Fri, Dec 19 2008, 15:07 GMT
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