This explains why FMS survey respondents were so wary about companies being able to improve their balance sheets: with discounts come lower profit margins. 

Mastercard’s SpendingPulse forecasted a 15% jump in sales on Black Friday overall, led by an 18% rise for in-store retail sales. Net sales were below these estimates at 12% and 14% respectively. Overall, crowds in the malls have been thinner and the driving force of sales have been discounts. A large portion of sales in this holiday season is estimated to be for the purposes of inventory reduction as retail stores and e-commerce companies improve their balance sheets: both Amazon and Shopify have laid off staff in the past couple of months. News reports indicate that Amazon intends to cut a further 10,000 jobs with recent « workplace optimisation » programmes in their India operations attracting the ire of the government for improper termination, i.e. without cause or adequate compensation. Legal notices have been sent; if found guilty, the consequences can be severe. 

This highlights the weakness in the consumer discretionary sector as evident in the Fund Manager Survey. Between the standard defensive sectors – healthcare and consumer – respondents indicated that they were overweight in favour of « healthcare » over « consumer ».