Morgan Stanley says upcoming holiday spending budgets will look a lot like 2022

Morgan Stanley indicated on Monday that 2023’s holiday shopping season will see spending that resembles a similar output as 2022, with individuals expecting to spend roughly the same amount on holiday gifts and products.

The financial institution outlined its complete breakdown of its forty-eighth survey of ~2,000 consumers across the United States, which ran from October 26–30, to gauge consumer behavior ahead of the upcoming holiday season.

“Overall, 37% of consumers are planning to keep their holiday budgets roughly the same, 27% expect to spend less, and 25% expect to spend more. This means that retailers will be competing for a budget pool that is similarly sized to last year and will have to offer competitive prices to entice shoppers to choose their products,” Morgan Stanley said.

Furthermore, the investment bank stated that the majority of holiday shoppers (69%), “are waiting for retailers to offer discounts before starting their holiday shopping.” Shoppers also appear to be looking for 30% discounts, on average, before they begin spending, according to the survey.

As the 2023 holiday shopping season kicks into gear with Black Friday and Cyber Monday around the corner, investors can watch retail and e-commerce exchange traded funds come into focus. Some names to keep an eye on include the following:

• SPDR S&P Retail ETF (NYSEARCA:XRT)
• VanEck Retail ETF (NASDAQ:RTH)
• Amplify Online Retail ETF (IBUY)
• ProShares Online Retail ETF (NYSEARCA:ONLN)
• ProShares Decline of the Retail Store ETF (NYSEARCA:EMTY)
• First Trust S-Network E-Commerce ETF (ISHP)
• Direxion Daily Retail Bull 3X Shares (RETL)