🇨🇳 China stumbled on the starting blocks

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Hi Reader, here's what you need to know for November 28th in 3:03 minutes.

⛷ Finimized over a mulled wine at Bar du Moulin in Chamonix, France (❄️ 2°C / 35°F)

Today's big stories

The US got ready to splash out on holiday discounts, but Europe kept its purse strings gripped tight
There are big risks brewing in Europe but it's not too late to take action – Read Now
Record new Covid cases jeopardized China's return to normality

Gray Friday

What’s Going On Here?

US shoppers were gearing up to spend big in this year’s post-Thanksgiving sales, but folk across Europe seemed dead set against any festive splurges, according to research carried out by Boston Consulting Group (BCG).

What Does This Mean?

Jolly Americans weren’t going to let any turkey-induced bloating stop them from splashing out on seasonal discounts this year: researchers at BCG reckon they’re poised to spend about 6% more than they did back in 2021, despite the grimmer economic outlook. But that bargain-hunting zeal didn’t seem to have spread across the pond, where Brits and other Europeans were slashing budgets by up to 20%. That news will have dampened the spirits of store-owners, who were probably hoping that a recent uptick in retail sales would turn into a longer-term trend.

Why Should I Care?

The bigger picture: Retail’s not so seasonal.
Black Friday’s commonly seen as the time when retailers swing into profit, but the last quarter of the year isn’t as outsized as you might assume. A US Census Bureau study from 2019, the last pre-pandemic year, found that even stores stocking the most seasonal products, like games and toys, brought in only around a third of their sales in the period. And for retailers selling products like sporting goods or electronics, it was even less. So a holiday miracle might plump up sales and profit, but it’s far from the be-all and end-all.

For markets: Santa Claus is coming to town.
The Santa Claus rally might sound like some kind of yuletide parade, but the term actually refers to a well-known stock market quirk: shares tend to nudge higher around New Year’s, typically rising by about 1.5%. And sure, a rally that small might not seem like anything to write home about, but on the back of a recent recovery in US stocks, it could be a warming winter tipple to help thaw a chilly 2022.

You might also like: US retail sales are looking up, but a recession could still be in the cards.

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Analyst Take

Risks Of A Financial Crisis Are Bubbling Up In Europe

Stéphane Renevier, Analyst

For the first time in its history, the European Systemic Risk Board is sounding an alarm.

The board, which was created in 2010 to oversee the financial system of the European Union, is cautioning about the rising risks to the financial stability of the eurozone.

It sees seven systemic threats to the bloc’s financial stability – three of them severe.

That’s today’s Insight: why a top regulator is warning about big systemic risks in Europe – and what it means for your portfolio.

Read or listen to the Insight here

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