Markets slip at the start of a holiday-shortened week

Dow dropped 259, decliners over advancers 5-2 & NAZ went up 65.  The MLP index was lower in the 289s & the REIT index dipped to the 385s.  Junk bond funds hardly budged & Treasuries saw a little selling which took yields a little higher (more below).  Oil slid down to the high 68s & gold retreated 20 to 2624.

Dow Jones Industrials

Shoppers are ready to drop some cash this holiday season as total spending this year is expected to be at least $24B higher than last year, according to the National Retail Federation (NRF).  Online shopping is still the biggest hit, but in-person shopping is making a comeback & the NRF predicts nearly ½ of all shoppers will head to department & discount stores to knock out their shopping lists.  Store owners at the Galleria at Sunset in Henderson, Nevada, said it just gets busier each year.  "Black Friday was great. We hit goal. We actually passed goal, so that was good. It's better than last year. So that was good for us. Everybody always likes to try on stuff, too. So I think that's what keeps the malls open," said Bring it Back owner Brandon Nova.  Some spots at the Galleria at Sunset are seeing a flood of visitors, especially during the holiday season.  Store owners & employees said the customers want that in-person experience.  "Most of the families have the reason to come here and make their kids come here. This is the big reason for them, you know, to come to the mall," said Crazy Bungee owner Duygu Beg.  The mall's general manager said it hasn't been this busy since the pandemic.  "I would say since COVID, it's been the first holiday season where … we're feeling the holiday spirit. The customers, you can just feel that they're happy to be out shopping, happy to be out, you know, experiencing the holiday season," said Galleria at Sunset general manager Heather Cox.  There has been a huge rebound in in-person shopping over the last 4 years as consumers start to enjoy the social aspect of going to the mall again, according to the NRF.  "We, as consumers, don't shop just because we need something," said Mark Mathews, NRF's exec director of research.  "One of the main reasons that people go out is for deals, but it's also to be with family and friends and be engaged and a fun activity. And for a lot of people, shopping is a fun activity. So, you know, I don't think we're going to ever see an end of in-store shopping?"  Gift cards are the most popular item on people's wish lists this year, followed by clothes & accessories, then books & other media, according to the NRF.

In-person shopping makes a comeback amid record-spending holiday season

Nordstrom (JWN) announced it will become a private company after it agreed to a buyout deal valued at roughly $6.25B from the founding family & Mexican department store El Puerto de Liverpool.  The company's board of directors unanimously approved of the transaction, which is expected to close in the first ½ of 2025.  As part of the deal, the Nordstrom family will have majority ownership in the company, with 50.1%, & Liverpool will own 49.9%.  Common shareholders will receive $24.25 in cash for each share of Nordstrom common stock they hold.  “For over a century, Nordstrom has operated with a foundational principle of helping customers feel good and look their best,” CEO Erik Nordstrom said.  “Today marks an exciting new chapter for the business. On behalf of my family, we look forward to working with our teams to ensure Nordstrom thrives long into the future.”  JWN stock fell 34¢ to 24.19.

Nordstrom to go private in $6.25 billion deal with founding family, Mexican retailer

Treasury yields inched higher as the holiday-shortened trading week began.  The yield on the 10-year Treasury was 2 basis points higher at 4.546%, while the 2-year Treasury was up 1 basis point at 4.330%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  Orders for durable goods — generally big-ticket items such as aircraft, appliances & computers — fell 1.1% in Nov, the largest month over month drop since Jun, according to preliminary data from the Dept of Commerce.  This followed a 0.8% increase in Oct.  Also on the data front, the Conference Board's consumer confidence index for Dec fell to 104.7, compared to the estimate of 113.0.  The 10-year yield jumped 13 basis points last week after the Federal Reserve pared down rate-cut projections, indicating only 2 more interest rate cuts lie ahead in 2025, down from 4 potential cuts that had been signaled in Sep.  Yields cooled a bit Fri after the Nov personal consumption expenditures price index, the Fed's preferred measure of inflation, came in slightly below expectations.  Markets close early tomorrow & are shuttered Wed for the Christmas holiday.

Treasury yields trade slightly higher to start holiday week

Stocks were mixed as investors considered the path of interest rates next year after the Fed hinted they would stay higher for longer.  The  stock market is coming off an upbeat Fri but a downbeat, & volatile, week with all 3 major averages up above 1% Fri but down around 2% for the week.  The Fed is playing the part of the Grinch, signaling that it will step back its pace of cutting next year, leading stocks to 2 of the worst days of the year on Wed.  Investors are betting on the Fed holding rates steady next month & for its subsequent meeting in Mar, bets are about 50-50 on a cut vs. a hold.