Art Cashin's Cynical Recollections Of Black Fridays Past And The End Of Washington's Cone Of Silence
The two day rally, wrapped around Thanksgiving, is hardly a surprise to UBS' Art Cashin. It’s an old pattern that he discussed on CNBC on Tuesday. What was a surprise to him was the magnitude of Friday’s move. "A bit unusual" he notes, adding that "the markets then began to buy into the Black Friday hype that filled TV screens. Mobs of people clutching all manner of electronic devices. That seemed to inspire interest and short covering in the recently depressed tech sector. That allowed the market, led by the techs to close the abbreviated session with a full flourish," but Cashin warns that this new week often starts with a rethink - as he advises a "solid skepticism about early reports... Other years, we learn that Black Friday success just cannibalized other sales. We’ll see what happens this year." Also, with over 400 microphone hunting legislators returning to Washington,
the cone of silence on the fiscal cliff is probably just a memory.
Via UBS' Art Cashin:
The calendar has lots of market moving possibilities like GDP; Durable Goods and Initial Claims. Additionally, there's a saloonful of Fed speakers set over the week. The market may, in fact, be in the hands of politicians, both here and across the pond. On this side of the pond, over 400 microphone hunting legislators return to Washington so the cone of silence on the fiscal cliff is probably just a memory. Meanwhile, the President seems set to spend the week on the campaign trail, possibly reiterating his pledge to veto any tax cut extension on the top end. Fastening seat belts may be in order.
Some Cynical Recollections Of Black Fridays Past – As noted above, the media frenzy on the Black Friday crowds appeared to help the stock market especially the techs. But, over the decades, many traders, including yours truly, have developed a solid skepticism about early reports.
Merchants have a keen interest in promoting Black Friday. They hope that reports of huge crowds and success will inspire other consumers to join the Christmas rush in the days that follow. It’s a variation of creating the image of this year's "must have" toy. As the season wears on, however, we often learn that the large crowds were there for the door-buster specials then put the wallet back on the hip. Other years, we learn that Black Friday success just cannibalized other sales. We’ll see what happens this year.