Morgan Stanley Bearish on Holiday Shopping Season

I don't know.

Seems like things are actually picking up lately. Besides, didn't Morgan Stanley get an Obama bail out after the 2008 crash? Moral hazard and all that. Who's can trust 'em?

Well, as Kathleen Sebelius would say, "whatever."

At LAT, "Holiday-season retail sales look bleak, Morgan Stanley predicts":

Count on coal this Christmas.

That's what researchers at Morgan Stanley are saying in the first major forecast of a decidedly dour holiday season. Retailers hoping for a respite from a year of so-so shopping can instead expect the worst Thanksgiving-to-Christmas sales since 2008, the financial services firm said Thursday.

Five years ago, the industry was free-falling into recession. This year, a new collection of worrisome economic conditions looms as stores gear up for a period that can sometimes account for 40% of annual revenue.

Shopper confidence is low. The recent federal government stalemate and shutdown was a damper. The window for holiday shopping is six days shorter than it was last year.

At the same time, consumer spending, which makes up more than two-thirds of economic activity, is actually getting a boost. Gasoline prices are lower, and net worth is rising because of higher real estate values and a stock market upswing, Morgan Stanley said in a report.

But instead of shoveling extra money into gifts, many Americans are plowing it into big-ticket items such as cars, appliances and home improvement goods.

The report anticipates that during the fourth quarter, retailers will see a scant 1.7% increase in sales at stores open at least a year. Such same-store sales are an important indicator because they eliminate the effect of opening and closing outlets during the previous 12 months.

Strip out struggling J.C. Penney Co., which researchers predict will roll out deep discounts early in the season, and projected sales growth slips to 1.6%.

That's less than half of last year's 3.5% expansion, according to Morgan Stanley...

Nah. It's gonna be fine.

Indeed, the piece continues, "the National Retail Federation said it expected holiday sales to rise 3.9% to $602.1 billion." That's what I'm talking about!