Black Friday Stocks: Markets to Trade on Black Friday?

Black Friday Stocks Market Rally: Historical Perspectives

Here is a review of the Black Friday stock market performance from 2021 to date.

November 26, 2021: This was a peculiar time. The world was still reeling from the COVID-19 pandemic, and after months of lockdown, some countries reluctantly began to ease them. This allowed for some limited Black Friday offline activity. However, the discovery of a new Omicron variant of COVID caused sharp selloffs in various markets. Black Friday 2021 saw one of the worst performances of the US stock market and Black Friday stocks.

November 25, 2022: Black Friday sales were largely underwhelming, and the uncertainty spilled into the markets. COVID was still not over, and offline shopping was still on its way to a comeback.

November 24, 2023: Black Friday 2023 saw a mixed performance in the stock markets with a slight bullish tilt. While the Dow and S&P 500 gained marginally, the Nasdaq shed 0.1%.

November 29, 2024: Black Friday stocks performed well, and there was a clear market rally on all US indices. The S&P 500 and Dow posted record closes during the session, which lasted only half a day.

Black Friday Core Sectors to Trade

Here are the Black Friday core sectors to trade on the day, including stocks and ETFs. There is also an explanation of how the data impacts these assets, so you know what to look out for.

a) E-Commerce

A significant portion of Black Friday sales occurs through e-commerce channels, as indicated by real-time sales headlines provided by Mastercard and the National Retail Federation (NRF). Adobe also provides online sales updates, as well as updates on online cart AOVs, app or site traffic statistics, and conversions. Any sales beats or misses form the basis of forming a bias on the Black Friday stocks.

b) Payments/Buy Now Pay Later (BNPL)

Card volumes and the BNPL shares jump on the day, posting some of the highest volumes in a year. Triggers to look out for are the Mastercard SpendingPulse updates and posts from reputable blogs that detail peak sales volumes and BNPL share prints. However, traders must be aware of revisions and guidance risks, which could cause positions to unwind.

c) Gaming and Consumer Electronics
Have you ever seen a video of when the stores open for Black Friday in the US? If you have, you would notice that the first set of buyers to get in usually go for the TVs and household electronics first. That indicates that gaming devices/accessories and consumer electronics experience a significant surge in demand on Black Friday. Stocks of companies that conduct business in this sector can be classified as Black Friday stocks and should be on the radar of traders. There is also a Cyber Monday pull-forward effect that drives demand in this category.

Triggers to watch for include Adobe updates on electronics and gaming, as well as sell-out rates. However, if discounts are too deep, this could ultimately hit retailer margins and unwind long positions when the complete data is released.

d) Logistics/Last-Mile

There is no Black Friday without logistics. If you buy online, you need to arrange for your goods to be shipped. Order fulfillment is the last-mile function in the retail supply chain. Triggers for trading stocks in this category include updates on package counts, surcharges, on-time metrics, and other relevant information.

These stocks experienced their best season in a while from 2020 to 2022, as shoppers confined to their homes relied on them to deliver the items they purchased during Black Friday.

Best Black Friday Stocks to Buy

Drawing inferences from the previous paragraphs, here are the Best Black Friday Stocks to buy.

a) E-commerce: Key assets to watch in this category include Amazon (AMZN), Walmart (WMT), Target (TGT), eBay (EBAY), Shopify (SHOP), Macy’s (M), Costco (COST), Ocado (OCDO), and Tesco (TSCO). Also, consider the following ETFs: Consumer Discretionary Select Sector SPDR Fund (XLY), ProShares Online Retail ETF (ONLN), and Amplify Online Retail ETF (IBUY).

b) Payments/Buy Now Pay Later (BNPL): Stocks and other assets covered under the Payments/BNPL category are Mastercard, VISA, American Express, Affirm and PayPal.

c) Gaming and Consumer Electronics
Brands such as Logitech (LOGI), Apple (AAPL) and EA sports, along with retail chains known as distribution channels for video games and consumer electronics such as Best Buy (BBY) fall under this category.

d) Logistics/Last-Mile

FedEx, UPS, Amazon, DHL and other regional carriers are the stocks of choice when trading this category.

Black Friday Stocks: How do the Payment Names React?

The payment names refer to the stocks of the card payment and processing companies. Every time people pay for an item on Black Friday, they will most likely use their credit or debit cards. The card processors are MasterCard (MA), Visa (V), and American Express (AXP). However, we also have payment processing companies such as PayPal,

A positive card volume, i.e., Average Order Value (AOV), usually puts these three stocks on bid. If there is a jump in the percentage of Buy Now, Pay Later (BNPL) purchases, then companies like Affirm Technologies (AFRM) should be on the radar of traders. Note that Goldman Sachs has recently updated its outlook for AFRM, and despite a price downgrade from $90 to $83 per share, this still presents a 25% upside potential from the current market price.

With specific reference to the payment names,

• Mastercard (MA) reached an all-time high of $ 534.10 on Black Friday 2024, ultimately closing at $532.94.
• American Express (AXP) closed at $304.68, posting a gain of 0.14% on the day as the Black Friday market rally carried through.
• Visa closed flat at $315, impacted by some company-specific events.
• Affirm (AFRM) closed at $70.01 on Black Friday 2024, after momentum in Buy Now, Pay Later sales kept the stock on bid.

These Black Friday stocks benefited from stronger online spending, with e-commerce sales topping $10.8 billion on the day. The talk of the markets was Affirm, which did well on BNPL sales.

These performances will serve as the template for judging Black Friday 2025’s year-on-year performance.

Black Friday Holiday Retail Sales Forecasts

What are the forecasts for 2025’s Black Friday retail sales? Adobe Analytics projects Black Friday online retail sales at $11.7 billion. This represents an 8.3% YoY increase and is based on the expectation of a substantial year-on-year increase in Buy Now, Pay Later sales numbers to the tune of $762 million.

Black Friday is no longer just a one-day event. The shopping season extends into the next week, kicking off on Cyber Monday. Adobe also projects US online retail sales for November 1 – December 31 to top $253.4 billion, representing a 5.3% year-on-year increase. Adobe’s online sales projection for the Cyber Monday sales week tops $43.7 billion, representing a 6.3% increase from the same period last year.

Mastercard SpendingPulse expects online retail sales to rise 7.9% and in-store sales to tick 2.3% upwards. These provide a firm basis of optimism for those watching stocks against the Black Friday weekend.

How to Purchase the Black Friday Stocks

Open an account with a brokerage that gives you access to the US stock markets to trade the individual stocks. Alternatively, you can purchase CFDs on these stocks from an MT4 or MT5 broker, or any other broker that offers these products.

For ETFs, you may decide to open an account with a broker that gives you access to the US Black Friday ETFs. Fund the account and trade using limit orders to avoid wide spreads that come from slippage on market orders. Beginners should avoid leveraged ETFs.

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