Market Wrap-up for Nov. 19 - Gearing Up for the Holiday Season

Market Wrap-up for Nov. 19 – Gearing Up for the Holiday Season


The holiday season is upon us in the U.S., as consumers will scramble to find the best deals and take advantage of the shopping frenzy that comes with this time of year. Consumers are not alone, as major companies have to prepare for the holiday season to be sure that they can meet demand and operate smoothly. Everything from retailers to shipping companies (many of which are dividend stocks) will be on their toes through the end of the year.

Holiday Shopping Spree

At first, the shopping craze may seem removed from the investing world, but this period can have a large impact on some of the biggest dividend paying stocks out there. Companies are expected to turn in significant results during the holiday season with increased revenues and a bump in earnings. Everyone from Apple (AAPL) to Wal Mart (WMT) will be under pressure to meet the raised expectations set out by analysts.

A lot of companies see their highest revenues during the holiday season, making it crucial that they can keep up with their customers as well as staving off competition. To give you a better idea for just how much money is spent during the holiday season, for online shopping alone in 2013 more than $5 billion was spent on Black Friday and Cyber Monday combined.

Last year, both FedEx (FDX) and United Parcel Service (UPS) were taken by surprise when their shipments jumped 23% the week after Thanksgiving. On-time shipments dropped and fell well short of goals due to the glut of demand. Because of this occurrence, the companies have taken a number of precautions to ensure that they are amply prepared for this year’s rush.

What to Watch for

As an investor, especially if you own or are thinking about purchasing any retail or shipping stocks, it is important that you keep a watchful eye on the holiday season. Some companies may keep investors updated along the way with how their holiday season is going, but others may wait until earnings drop in 2015.

Pay special attention to any holdups or problems with the stocks you are watching, especially if these problems are impacting sales. Your goal as an investor is to be as prepared as possible for the earnings reports in early 2015, as they are often the most important of the year.

Be sure to check us out on Twitter @dividenddotcom.