Investors keep a close eye on U.S. retailer stock prices, a key indicator of consumer confidence. Meanwhile, the country's inflation rate is gaining momentum ahead of the holiday shopping season.
Jim Paulsen, chief investment strategist at Leuthold Group, said U.S. consumer stocks provide a glimpse of how fast the economy is slowing and how much lower inflation is contributing to Wall Street's confidence.
The National Retail Federation (NRF) said that U.S. holiday season sales, including e-commerce, are likely to hit $942.6 billion to $960.4 billion from November through December. It would be 6-8% higher than the previous month's data, but still below the spike of 13.5% in 2021.
Retailers have now started to make discounts in order to attract more customers. In doing so, promotional sales are being made earlier in this year compared to previous periods. These measures proved to be popular after a revision of the Consumer Sentiment Index from 54.7 to 56.8. The data exceeded the University of Michigan's average forecast of 55.0 but remained below October's reading of 59.9. According to the survey, sales of manufactured goods were down 21% due to the rapid pace of rate hikes and growing inflation.