Money Minute: Are Holiday Bargains Illusory? Tiffany Shares Set to Shine


Big sale. Thirty percent off. Half price. Are they real holiday bargains, or retail trickery?

Many deeply discounted items advertised for Black Friday and throughout the holiday shopping season are merely illusions. The Wall Street Journal reports that retailers often purchase items with the intent of offering big discounts from what they say is the regular retail price.

Black Friday bargains
Aram Boghosian for The Boston Globe via Getty Images

Even on sale, those items yield the profit that had targeted. Basically, the discount has been built in. One survey found that profit margins during the holidays are virtually the same as they are the rest of the year, despite the big bargains being advertised.

Here on Wall Street, a modest rally fizzled out near the close on Monday. The Dow Jones industrial average (^DJI) edged 7 points higher and the Nasdaq composite index (^IXIC) added 3. The tech bellwether spent most of the day above the 4,000 level, before falling back. The Standard & Poor's 500 index (^GPSC) fell 2 points.

The market has been in rally mode all year, and if history is any guide, the next few weeks should be pretty good too. The S&P 500 has gained ground in the three weeks after Thanksgiving in each of the past 10 years. The average increase: a healthy 3.2 percent.

Shares of jewelry retailer Tiffany (TIF) are set to shine after posting a 50 percent jump in quarterly earnings. The company also raised its full year outlook.

The restaurant chain Cracker Barrel Country Store also reports its quarterly results, but Wall Street could focus on shareholder rejection of a plan by one of the company's biggest investors to take seats on the board. It's the fourth time Biglari Holdings has tried, and failed, to win the support of fellow shareholders. They apparently like how management is doing on its own. Cracker Barrel (CBRL) stock is up 86 percent over the past year.

And Qualcomm (QCOM) is under investigation in China for violating that country's anti-monopoly laws. Qualcomm makes key components for Apple (AAPL), Samsung and other smartphone makers.

-Produced by Drew Trachtenberg.