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Consumer sentiment, retail movers —What to know in markets Friday

Heidi Chung

It’s all about the consumer on Friday.

Investors will get a pulse on the health of the consumer when the University of Michigan releases its final reading of consumer sentiment data ahead of the market open. Meanwhile, retail stocks like Nordstrom (JWN) and Gap (GPS) will be active during Friday’s session following earnings announcements late Thursday. Foot Locker (FL) will release its quarterly results ahead of the opening bell Friday.

Economists polled by Bloomberg expect consumer sentiment to have stayed steady from October’s reading at 95.7.

“Consumer sentiment measured in the University of Michigan survey has improved for three consecutive months after a sharp drop in August,” Nomura said in a note to clients November 15. “Recent increases in sentiment have been relatively broad-based across consumers’ evaluations of their financial situation, expectations and evaluation of buying conditions for large household items. Recession concerns continue to ebb in both consumer and small business surveys as growth momentum stabilizes and employment gains remain strong. As a result, while consumer sentiment may fluctuate from month to month, we expect continued elevated readings over the near term, in line with our expectation of healthy consumer spending growth in Q4.”

Clothes are seen on display at the Denims alteration section of the Nordstrom flagship store during a media preview in New York, U.S., October 21, 2019. REUTERS/Shannon Stapleton

Shares of Nordstrom and Gap rose in after-hours trading Thursday after reporting quarterly results.

Nordstrom impressed investors after reporting better-than-expected full-year adjusted earnings guidance and revenue that beat expectations in the third quarter. Digital sales grew 7% during the quarter and now represents about 34% of total sales at Nordstrom. Shares of Nordstrom jumped 8% on the results.

Nordstrom’s report comes on the heels of rival Macy’s (M) disappointing results ahead of the market open Thursday. Unlike Nordstrom, online sales growth slowed at Macy’s due in part to more competitive pricing at rivals. Macy’s stock ended Thursday’s session 2.3% lower.

Gap also took investors by surprise and posted better-than-expected sales and profit during the third quarter. The retailer said that it is still making progress towards separating its Old Navy and Gap brands. Shares rose more than 1% in after-hours trading.

It’s been tumultuous for Gap recently. Earlier this month, the retailer caught investors off guard when it abruptly announced that president and CEO Art Peck would be stepping down from his role. Robert Fisher, who previously served as Gap’s non-executive chairman, is stepping in as interim CEO.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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