The U.S. stock market seems to have defied the eerie All Hallows’ Eve by maintaining its bull run, and the ‘Halloween Strategy’, a technique in which investors start placing big bets on All Hallows’ Eve after restraining in the preceding six months, gives us, even more, optimism right now.
Demand for candies and costumes in the Halloween season drives sales at U.S. retailers, including discount stores. Sales of such items are poised to beat the previous year numbers, courtesy of upbeat consumer sentiment. The finances of consumers have, largely, benefitted from an improving economy with lower unemployment and better wages.
Spooky Stock Market Ghosts, Goblins and Ghouls
The fears and apprehensions concerning the broader market are unsubstantiated.
For instance, has the war of words between North Korea’s Kim Jong-Un and Trump scared investors? Apparently not, as the market continues to gain unhindered.
Another fear is that the Fed will hike rates, killing a bull market fueled by cheap borrowing. But, policymakers haven’t hiked rates yet. They fear that a rate hike will strengthen the dollar, eventually denting U.S. exports and hampering economic growth.
Finally, should a lofty valuation give you goosebumps? Nope and nope. Bull markets often scale to a string of record highs. So, if you succumb to the fear of highs, you eventually lose money.
Halloween Drives Record Sales of Candy
With more money expected to pour in, candy sales are expected to rise. In fact, Halloween accounts for about 10% of the industry’s total annual sales, which in turn leads to fierce competition among confectioners.
According to IHS Markit data, candy sales are set to rise 4.1% from last year, reaching a seasonally adjusted $4.1 billion. This is particularly impressive given that candy prices have declined 0.9% from last year, marking the second successive drop in Halloween candy prices.
Halloween is like Super Bowl Sunday for North America’s largest chocolate maker — Hershey Co (HSY – Free Report). Banking on this upbeat sales forecast, the maker of Kisses, Reese’s, Krackel, Symphony and Mr. Goodbar expects sales to go up 8% from last year. The company has seen its earnings grow over the last five years, driving its share price from $70 to nearly $105.