Some sectors sleigh, others delay

The holidays have arrived, but not every company is feeling the cheer.

The airline sector took a beating over the weekend after Thanksgiving Sunday brought widespread delays and cancellations during what was expected to be one of the busiest travel periods of the year.

Airlines for America projected 31 million passengers would fly between Nov. 21 and Dec. 1. But a mix of stormy weather and the lingering effects of the recent government shutdown took their toll: Over 12,500 flights were delayed and 1,027 were canceled on Sunday alone, according to FlightAware.

The chaos follows a major manufacturing setback. On Friday, Airbus recalled roughly 6,000 aircraft globally amid concerns that intense solar radiation could corrupt flight-control data. Shares fell 3.08% today.

The turmoil caused earlier this quarter by a government shutdown combined with a rough Thanksgiving weekend means that the rest of the holiday travel season is now even more crucial than ever if airlines want to hold on to their 2025 gains. Delta, United, and Southwest are each up between 4% and 6% this year, while the industry-wide JETS ETF has risen 3.6%.

Not everyone’s on the naughty list

While airlines took a hit, other corners of the holiday economy are looking far healthier.

Retail stocks usually rise the week after Black Friday as investors expect discounts to drive strong holiday-quarter sales. That trend should continue this year after Americans spent $11.8 billion shopping online during Black Friday, a 9.1% year-over-year increase.

It’s not just retailers benefiting: BNPL providers are emerging as some of the biggest winners of the season. Adobe reported that $747.5 million in Black Friday purchases were made through BNPL, an 8.9% increase from last year. Looking ahead, Adobe expects $20.2 billion in BNPL spending this holiday season, an 11% year-over-year increase.

That’s great news for BNPL players like PayPal, Klarna, and Afterpay, but Affirm stands out from the crowd: The stock has averaged a 9.1% gain in the week after Black Friday over the past three years, according to Barron’s.

Will Wall Street get its holiday magic?

But even with parts of the holiday economy looking strong, investors may not get their usual Santa Claus rally.

The market’s unpredictable mood lately has powered both sudden rallies and abrupt pullbacks, leaving investors guessing. Rate-cut expectations have been just as volatile: markets now see an 83% chance the Fed will cut rates at its December meeting, up from about 30% just last week.

With sentiment shifting this quickly, the Fed’s decision on Dec.10 has become the next major catalyst, and could determine whether Santa Claus will leave investors with a gift or a stocking full of coal.—SY