The national ritual of frantic sales on the day after Thanksgiving will soon commence. It’s called “Black Friday,” although I prefer to call it: “The Day of the Locust.”

When you see hordes of shoppers on television later this week scratching and clawing each other liked crazed post-Apocalyptic survivors, remind yourself that this spectacle is crucial to the American economy.

You see, about three-fourths of U.S. gross domestic product is made up of consumer spending, and in turn about three-fourths of consumer spending occurs during the holidays. And of course, the traditional start to the seasonal spending madness is Black Friday.

Projections are optimistic this holiday season for e-commerce as well as bricks-and-mortar retailers. The unemployment rate stands at a 50-year low and, despite elevated interest rates, consumers are feeling flush. The public is expressing dissatisfaction with the incumbent administration in the White House and with the condition of the economy, but you wouldn’t know it from the way consumers are opening their wallets.

On November 9, Adobe released its first set of online shopping insights, assessing the pre-holiday season from October 1 to October 31, 2023, in advance of the big shopping days during Cyber Week.

Cyber Monday (the nearest Monday after Thanksgiving) is now called Cyber Week by most retailers. Retail sales can last all through Thanksgiving and Black Friday week and deals even start popping up as early as November 1.

The stock market tends to rally on Black Friday. Retail stocks, in particular, usually surge if consumer spending is strong.

Adobe’s advance figures are encouraging and presage a prosperous week for retailers. In October 2023, consumers spent $76.8 billion online, up 5.9% year-over-year and representing $4.3 billion more than the previous year ($72.5 billion spent in October 2022). That level also represents a 13.6% increase compared to the month prior (September 2023).

In its latest holiday retail report, Deloitte forecasts that holiday retail sales (Thanksgiving through Christmas) will increase between 3.5% to 4.6%, compared to the 2022 season. E-commerce holiday sales are projected to grow between 10.3% to 12.8%, compared to 2022.

The following chart tells the holiday retail story:

Thanksgiving week historically has been marked by lighter trading volumes, with many market participants taking time off to celebrate the holiday with family and friends. However, the market tends to perform well during the holiday-shortened week, with a historical tendency for positive returns.

Wall Street calls it the “Thanksgiving Effect,” a phenomenon whereby investors, buoyed by holiday cheer, display a more optimistic outlook.

Investors lately have certainly displayed a heightened risk appetite. Last week, the main U.S. stock market indices racked up their third consecutive week of gains.

Technology stocks have soared, buoyed by falling bond yields, cooling inflation, and optimistic projections for economic growth.

Robust retail sales are cheering investors, but as we enter the final stretch of 2023, several technical indicators also are positive.

The benchmark 10-year U.S. Treasury yield has fallen to 4.41%; the CBOE Volatility Index (VIX) has fallen to 13.33; the New York Stock Exchange Advance/Decline line (NYAD) has been rising; and the S&P 500 hovers above its 50- and 200-day moving averages.

What’s more, corporate earnings for Q3 have come in better than expected, with several sector bellwethers beating expectations on the top and bottom lines.

On Tuesday, the main U.S. equity indices took a breather from their long winning streak and closed lower, as follows:

• DJIA: -0.18%
• S&P 500: -0.20%
• NASDAQ: -0.59%
• Russell 2000: -1.32%

A major factor driving stock market gains so far this month has been the collective feeling on Wall Street that we’ve witnessed peak interest rates.

Which brings me to the utilities sector.

Among the publications that I edit is our premium trading service Utility Forecaster. My colleague Robert Rapier is the chief investment strategist.

As you position your portfolio for next year, turn to utilities stocks. The utilities sector has gotten clobbered lately by rising interest rates, but it’s poised to rebound when the Fed pivots in 2024. That means value plays are ready for the picking.

However, you need to pick the right ones. For our list of the highest-quality utilities stocks, click here now.

John Persinos is the editorial director of Investing Daily.

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