Online Shopping Surges on Black Friday Weekend More people shopped online than in stores during the Thanksgiving and Black Friday weekend, a retail survey said, a sign of how quickly and deeply American shopping habits have changed.
(…) Consumers spent an estimated $4.45 billion online Thursday and Friday, with Black Friday sales rising 14% from a year ago, according to Adobe Systems Inc., which tracks purchases across 4,500 U.S. sites. It estimated that more than half of Black Friday shopping came from mobile devices. At Wal-Mart Stores Inc. about half of online orders since Thanksgiving have been placed on mobile devices, almost double the amount last year, according to the retail chain.
At the same time, the Thanksgiving shopping ritual appears to be losing steam overall, blending into a longer holiday season that starts before Halloween and extends up until the hours before Christmas for some shoppers. Americans spent an estimated $12.1 billion at traditional stores over Thanksgiving and Black Friday, a decline from last year, according to ShopperTrak, which uses cameras to measure shopping. (…)
On Sunday, the retail federation estimated that more than 103 million people shopped online over the Thanksgiving weekend and nearly 102 million shopped in stores, based on its survey of 4,200 shoppers. (…)
Emerging-Market Defaults Hit Six-Year High Emerging-market corporate-debt defaults reached their highest level since 2009, as economic conditions worsen for companies that spent years piling up their borrowings.
(…) Corporate defaults in emerging countries have hit their highest level since 2009 this year, and are already up 40% over last year, according to Standard & Poor’s.
For the first time in years, emerging-market companies are defaulting more often than their U.S. peers. The default rate on emerging-market corporate high-yield debt over the past 12 months has reached 3.8%, compared with 2.5% in the U.S., according to Barclays. Four years ago, the emerging-market default rate stood at 0.7%, well below 2.1% in the U.S. (…)
While emerging-market corporate debt globally has risen fivefold over the past decade, totaling $23.7 trillion in early 2015, according to the Institute of International Finance, much of the increase has come from emerging Asia, where the nonfinancial corporate debt to GDP ratio has risen to 125%, up from 100% five years ago. (…)
Waning lender appetite and the growing inability to raise capital despite low interest rates has left bond issuance in emerging markets down almost 30% from a year ago. (…)
Against that backdrop, companies and countries in emerging markets are due to repay almost $600 billion of debt maturing next year, according to the Institute of International Finance, of which $85 billion is dollar-denominated. Almost $300 billion of nonfinancial corporate debt will need to be refinanced next year. (…)
OPEC Is Ready to Rumble Over Saudi Output Pressure is building on Saudi Arabia to rein in its oil output after a year of pumping full tilt, setting up the most contentious OPEC meeting in years this week.
(…) Privately, Saudi officials acknowledge they too have been distressed by the persistence of low oil prices, which has forced the kingdom to spend down some of its reserves of hard currency. They are considering their options “because there is a growing discontent in the kingdom about the low oil price,” said an oil official from a Persian Gulf country.
But Saudi Arabia is unlikely to consider cutting until June 2016 at the earliest, when Iran’s ability to return to the market and the effect on prices becomes clear, analysts and officials say. Answers to questions about demand, especially surrounding an economic slowdown in China, the world’s biggest consumer of energy, will also be clearer then. (…)
The most likely outcome of the meeting, OPEC delegates have said, is an increase in the group’s production target to about 31 million barrels a day, up from 30 million barrels a day, to accommodate the re-induction of Indonesia to the group—a move that won’t change the world’s supply-demand balance. (…)
“No one is happy with the current situation,” said a Persian Gulf country official. “The lower oil prices are lasting longer than initially expected and everyone wants the price to bounce back up soon.”
(…) The belt-tightening comes at one of the most testing times in the kingdom’s history, with the Sunni Saudi monarchy locked in a regional power struggle with Shia Iran and sectarian tensions flaring across the region. Determined to reassert its leadership role in the Sunni Muslim world and confront Tehran, Riyadh in March launched a military campaign in neighbouring Yemen to push back Iran-backed Houthi rebels. (…)
Saudi authorities have cracked down on Isis cells in the country in recent months. But while Saudis see themselves as victims of Isis, many outsiders consider the kingdom’s dependence on the clerical establishment, and its determination to spread its Wahhabi brand of Islam worldwide, as part of the problem, contributing to the radicalisation of Sunni youth and breeding jihadis.
“The picture is bleak,” says a Riyadh businessman. “The longer oil prices are depressed and turmoil in the region continues and the longer we have security issues in the country, the less options there are and the more dire the situation will be for Saudi Arabia.” (…)
The government has slashed public spending by a quarter, raised $27bn through local debt issuance this year and is considering an international bond programme in 2016. The swingeing $80bn in cuts, bringing spending down to $267bn, will be followed by more austerity next year as the government looks at a budget of $229bn-$240bn. (…)
(…) Traders are alreadyboosting bets the Saudi riyal may be devalued and Standard & poor’s has lowered the country’s credit rating. Now liquidity in the banking system is being squeezed, with demand deposits dropping 4.7 percent in October as businesses, individuals and government entities withdrew cash. (…)
Global growth bounces back a bit Economic data published in November have shown a further uptick in worldwide activity growth
(…) It now appears almost certain that the 2015 Q3 dip in world activity was not the precursor of a slide towards global recession. Instead, it seems to have been another of the minor mid-course corrections that have been a consistent feature of the moderate upswing in global activity that started in 2009. (…)
Overall, the global economy continues to grow below trend rates, so at some deep level the deflationary pressures in the system are not abating. However, the specific deflationary impetus from the commodity price collapse is now passing its maximum effect so recorded rates of headline and core inflation are likely to rise significantly in the next few months. (…)
In China, activity growth has not followed the pessimistic path that was predicted by so many observers in August. At that stage, activity growth dipped to about 5.8 per cent but since then it has gradually recovered to 6.4 per cent, which is almost exactly in line with the model’s estimate of long-term trend growth. It is likely that the combination of monetary and fiscal easing announced from April onwards has had some beneficial effect, but it also appears that the recessionary forces in the industrial and construction sectors have not been as great as the pessimists feared.
Of course, there are many observers who believe that Chinese activity data are largely fictitious, and no amount of published data will change their minds. But our nowcast models include many official and some unofficial data sources, and it seems unlikely that systematic “cheating” is capable of completely distorting this entire raft of data for long periods.
Full details of this month’s nowcasts and global industrial production data are attached here.