It’s time for the annual indulgence season, a five-week period during which approximately one-third of Americans gain weight, while their wallets grow ever slimmer. In most regards, it’s a happy time, with many of the rules about eating and spending tossed out the window. But for the nation’s retailers, it’s also crunch time, because many depend on the holidays for half their profits. Whether Americans are jovial enough to indulge substantially more than last year remains to be seen, with clues offered by Tuesday’s report on November consumer confidence. Chicago economist Diane Swonk looks for it to bounce to around 122, from 117.3 in October. “Consumers are feeling better because of a rebound in the stock market, lower interest rates and a stronger economy,” said Swonk, of Bank One Corp. “We expect holiday spending for general merchandise and apparel to show a gain of 5.2 percent from last year.”
GROSS DOMESTIC PRODUCT
SLOWING GROWTH?
Despite incessant concerns about an impending global economic slowdown, recent indicators, except in the manufacturing sector, have shown stepped-up activity. Watch for Tuesday’s revision of third-quarter gross domestic product to show a sizable advance beyond the 3.3 percent annual growth rate reported earlier. But economist Steven Wood of NationsBanc Montgomery Securities in San Francisco says the current robust pace will wane early in 1999. “U.S. economic activity is poised to slow, perhaps sharply,” he is telling clients. “Exports to every major part of the world are slowing–at an accelerating pace. Despite that, recession is not a significant worry at this time.”
GIVING THANKS
HOLIDAY CLOSINGS
Toting up another year’s bounty is on the agenda Thursday, as the nation pauses for Thanksgiving Day. Stock, bond, commodity and options markets are closed, as are government offices and many businesses. On Friday, financial markets will be open, but on a shortened schedule. The New York Stock Exchange will halt trading at noon Chicago time. As for workers, many summon up old ledgers of time due or dream up other excuses Friday to explain why they should shun their desks or workbenches.
STOCK MARKET
GAINING CONFIDENCE
Major averages in the stock market have recovered more than 80 percent since the near-panic of early autumn, but many laggard equities remain mired far below their highs. Chicago investment manager Marshall Front says three interest rate reductions by the Federal Reserve “have created renewed confidence in financial markets. We are in a liquidity-driven environment that should mean new highs by spring, and possibly sooner.” But Front, of Trees Front Associates Inc., says Wall Street will face a heavy challenge in 1999 if corporate earnings fail to meet expectations. “Unless profit growth reaccelerates next year–and we believe it will–the stock market could be vulnerable to another vicious correction.”
