Consumer Spending Disappoints Markets

Debra Borchardt explains why investors believe November sales slumped.
8:03 | 12/23/11

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Transcript for Consumer Spending Disappoints Markets
And -- -- -- the opening bell on. Now ring the bell this morning. -- Hillary. They're all looking for a home this holiday along members -- the home for the holidays pet adoption. There it is the opening bell Friday December -- the last trading -- Christmas. When I'm Dan Cutler in New York Dow futures they were up this morning though they did start to slide in the last hour. So let's two talk about that now it is headlines also at this -- their report chart from the street Deborah good morning to you -- morning. Our three and a lot of economic numbers ahead of the holidays let's start though with consumer spending just about an hour ago those numbers were out seems. A bit troubling for retailers figures were up just -- -- -- -- percent for the month -- -- does that -- -- holiday -- does not as strong -- what -- thought. Well you know we have that big Black Friday holiday weekend after Thanksgiving lots of sales and that they slowed down and the retailers are throwing everything they can't these consumers discounts -- twenty per hour shopping. They're trying everything they can do to get what -- you know -- dollars there are out there into their wallet. And we have been hearing at that first week in the second week of December that was really going to be a because a lot of -- put a lot of pressure on Black Friday but tunnels following days apparently is kind of tapered off -- little. Do you think that definitely slowed down and you have a lot of bargain shoppers that -- they wait the last minute they're gonna get some really good deals. -- yet for those people that didn't wait for the last minute and they went to best buy they are wringing their hands this morning because the company is saying that they. Cannot deliver a lot of the wars that were made online. That is a nightmare that -- there are right. That's terrible lie. And to get it by email -- note that says by the way your order is not going to get to you for the holidays and then to get that email so late that night have to rush out try to find somewhere else to buy that product. And the other coming under a lot of fire because these Christmas that they have people who. Then they hate these mean moms that are so mean does that mean how can you be mean that Santas so. They're really messing up I mean they're becoming that the new Netflix because really mean they have this market they own -- is there is no Circuit City. And how -- they screw the -- And they're trying to go up against Amazon in something like this to happen and it delivery problem that's. Brian you also -- Wal-Mart that's become a big appliance and electronics seller and so you're really starting to hurt your your core market -- also -- a look at some other numbers that -- just cannot incomes week. During this time up just -- point 1%. Right when you look at the economic data came out today that salary and wages component. With seven billion it was down from October's thirty billion so. Clearly that's affecting this consumer spending because you have less money there's less. Income going out less wages and salaries so people aren't obviously spending. When you put that kind of a broader context of the overall market -- we've seen some encouraging news on the jobs front but then when you at this point tenth of a percent increase. Is that a damper does that -- negate all those games that we got from the jobless numbers. Right or when you look at the jobs are added him -- mostly low paying jobs so that that also feeding -- some of the housing data that we got earlier this week which was that. Most of the building is on the apartment side on the multifamily she -- people leaving home. And going into apartments that are cheaper so everybody's downsizing. I'm most durable goods numbers that was also -- we're talking and appliances and it's gonna last long given a couple of a couple of years on this night and it is easily disposable. Those orders jumped three point 8% -- the largest gain. He said in four months so what's the reasoning behind them are having an idealist this. Here's the thing. Take out the defense. Take -- the transportation numbers and then you've got actually a really bad durable goods or order and that was the point you made about the appliances so. If you pull out the air that airplanes in the defense. You really have a pretty port number and so now you've got all these economists starting to think. This fourth quarter TV he's not going to be as good as what we have thought so that number is really I think what started to pull back. This futures -- -- up here so that's kind of like the smaller of the those big ticket items that's taking out automobiles that's taken up those large purchases planes things that you've been saying about. Right and sell it it what you solid that headline number in the futures went -- and that when people started to go into debt buying need Yeltsin agreed that the big -- little bits at the bottom they let this wasn't as good as. He thought house in -- -- a little bit also out in just short time new home sales numbers and we had some encouraging news. Wednesday -- existing home sales were up 4% for the month of November so how much do existing home sales and the new home sales. What you know what kind of coalition we might possibly expect. Well as -- mentioned earlier in the building starts it's all about multifamily and apartment and they -- followed that up with. The cheap existing homes all those foreclosures people just trying to get to. Unload their current home. New home sales they're gonna be hurt because why -- and new home when you can buy an older one. Really cheap so I I think that your Bannister to see this divergence between the new home sales and the existing. -- sale not necessarily working and now I understand yesterday -- a couple of traders. They were still little optimistic about Santa Claus rally what's what's your feeling I mean to markets in the gonna move much higher. -- sports point well. I think we are at the -- -- much higher but I think we're going to -- things kind of just ripped higher. Mostly because the big players are gone so what you've really got happening -- computer. Programmed trading. And so we can -- like to -- the robots are in charge right now so I think that you're going to see barring any horrible events in the world just kind of trickling up of the market. Nine -- it was -- are going beyond 2011 now the -- kind of tip its hand a little bit signaling that it may be keeping interest rates low. At least -- -- 2014. -- gonna see any kind of a market reaction from an announcement like that or is that than expected all along. You know well I think that the market reaction will be kind of you know -- -- -- -- -- rough road. Oh yeah here here we go again really things -- that bad that pushing this out even further. And then you've got of course people that -- -- fixed income that need these rates to go up because that's what they're depending not. It weird way it could be good for the stock market because people are gonna go when the stocks because they can't make any headway on treasuries. So in that -- -- help and let the promise going to be of course all those people that thought that treasurys were eventually going to. Move -- different direction hall. That clearly has been pushed up that. Does the Fed know something we don't know. Yeah well and that's always that way that people are gonna start looking at that there's going to be -- UST bills. I wanna autism business developments -- AT&T'S plan to buy T-Mobile that fell apart but now eighteen T. Has put together a plan with Qualcomm. What what's going on there. The government give -- in the government ticket -- the government took away T-Mobile and only. As as a parting get paid that well we took that away from you but we know you need something so here's some -- them from walk on so we'll we'll expect that there is so I think Adam. That we didn't let you get this -- will give you that. Always the bridesmaid never the bride -- Sense that worries me worry in Libya why do you worry -- -- -- -- -- even nine on this that lasted workers. And -- you know we're we're really just coasting at this point the key thing here is -- to make sure that you'll would be watching world events that nothing. Horrible happens out there are right now we know you're there at the same way they just -- -- -- -- the holidays that on anything awful happening. We also want the -- so. I think that the market like -- that will drift higher. Towards the end of the year which we only have one more week. And it again assuming no disasters notes due -- no you know room horrible war things then we shipped by the end of the year and -- and a positive way. Fingers crossed that will happen Debra -- -- from the street thank you so much and happy holidays -- here.

This transcript has been automatically generated and may not be 100% accurate.

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