This trend is relevant to any investor who’s relying on yields in the short term. If you’re thinking about adjusting to a more defensive allocation, this will reduce your short-term returns. If you’re a retiree who is actively allocating to dividend stocks, this will cause lower investment income.
I expect dividend yield to eventually rise along with interest rates, but I don’t think that will happen in January.
3. Retail sales results will be mixed
Consumers drive the American economy, so retail sales and consumer sentiment are always under heavy scrutiny. The holiday period is crucial for quantifying the state of consumers, but the data through mid-December was mixed.
The University of Michigan Consumer Sentiment metric dipped in November, but the Conference Board Consumer Confidence survey indicated a moderate improvement over the previous month.
Early holiday sales painted a messy, uninspiring picture. In-store sales improved dramatically on Black Friday, but digital sales dropped from the prior year. Supply-chain issues and labor shortages complicated the situation, so promotional activity and discounted prices were less common. Analysts expect that to spread holiday spending across more days, shifting some activity away from Black Friday and Cyber Week.