What a ‘Santa Claus rally’ is — and whether investors can expect such a gift in their investment portfolio

Historically speaking, there’s been a small lift to stock-market portfolios at the end of the year — a phenomena that many in the financial industry call “the Santa Claus rally.” “The Santa Claus rally is when the market tends to do well over the last two weeks of the year,” he says. It does happen — not 100% of the time, but around 60% of the time,” Lambert says. Some years, investors get coal: Last year, for example, the S&P 500 dropped almost 20% by late December. But historically, Lambert sa


Historically speaking, there’s been a small lift to stock-market portfolios at the end of the year — a phenomena that many in the financial industry call “the Santa Claus rally.”
“The Santa Claus rally is when the market tends to do well over the last two weeks of the year,” he says.
It does happen — not 100% of the time, but around 60% of the time,” Lambert says.
Some years, investors get coal: Last year, for example, the S&P 500 dropped almost 20% by late December.
But historically, Lambert sa
What a ‘Santa Claus rally’ is — and whether investors can expect such a gift in their investment portfolio Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: sam becker
Keywords: news, cnbc, companies, small, portfolio, week, investment, gift, tends, rally, historically, claus, market, financial, santa, lambert, investors, expect, weeks


What a 'Santa Claus rally' is — and whether investors can expect such a gift in their investment portfolio

Historically speaking, there’s been a small lift to stock-market portfolios at the end of the year — a phenomena that many in the financial industry call “the Santa Claus rally.”

Because Christmas lands within the last week of the year, Santa often gets credit for a small but measurable boost in the markets during that time, says Jason Lambert, the president and CEO of Northwest Financial & Tax Solutions near Portland, Oregon. “The Santa Claus rally is when the market tends to do well over the last two weeks of the year,” he says.

“It’s a real effect. It does happen — not 100% of the time, but around 60% of the time,” Lambert says. Some years, investors get coal: Last year, for example, the S&P 500 dropped almost 20% by late December.

But historically, Lambert says, the stock market tends to gain between 1% and 2% during the last 10 trading days of the year.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: sam becker
Keywords: news, cnbc, companies, small, portfolio, week, investment, gift, tends, rally, historically, claus, market, financial, santa, lambert, investors, expect, weeks


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Goldman Sachs has a simple ‘laggard’ stocks strategy for early 2020 that tends to beat the market

Buy 2019’s laggards as they will likely be 2020’s early leaders, Goldman Sachs said. The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman. In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said. Under Armour, Etsy, Twilio, Westlake Chemical and GoDaddy are among the names on that list. Petrochemical manufacturing company Westlake Chemical and web hosting company GoDaddy bo


Buy 2019’s laggards as they will likely be 2020’s early leaders, Goldman Sachs said.
The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman.
In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said.
Under Armour, Etsy, Twilio, Westlake Chemical and GoDaddy are among the names on that list.
Petrochemical manufacturing company Westlake Chemical and web hosting company GoDaddy bo
Goldman Sachs has a simple ‘laggard’ stocks strategy for early 2020 that tends to beat the market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: yun li
Keywords: news, cnbc, companies, strategy, beat, market, 500, westlake, stocks, 2019, trade, tends, armour, sachs, simple, chemical, goldman, laggard, laggards, early, performance


Goldman Sachs has a simple 'laggard' stocks strategy for early 2020 that tends to beat the market

Traders work on the floor at the New York Stock Exchange, October 25, 2019.

Buy 2019’s laggards as they will likely be 2020’s early leaders, Goldman Sachs said.

The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman. The prior year’s bottom-third stocks have outperformed the S&P 500 in the first quarter for 11 times out of the past 17 years with an average 1.4% extra return on the benchmark, the bank said. In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said.

Among the bottom third of the S&P 500 in terms of 2019 performance, the bank recommended buying the laggards that its analysts have out-of-consensus buy ratings and above-consensus estimates.

Westlake Chemical, L Brands, Terex, Yelp, Cree and Under Armour are some of the “buy-rated laggards” of 2019 where the majority of the Street has neutral or sell ratings but Goldman analysts recommend buying.

Goldman also likes laggards where the bank’s price targets are at least 5% above consensus in 2020. Under Armour, Etsy, Twilio, Westlake Chemical and GoDaddy are among the names on that list.

Under Armour is up only 5% on the year and Etsy fell 11% in 2019, both significantly lagging the S&P 500’s 24% gain. Petrochemical manufacturing company Westlake Chemical and web hosting company GoDaddy both are up about 1% this year.

To be sure, this year’s record-setting rally created a different set-up for this strategy as even the laggards are up year to date. So Goldman is advising clients against blindly piling into all of them.

“2019 has seen the strongest YTD absolute performance for laggards in over 5 years,” Alex Meintel, Goldman’s analyst said in a note to clients on Monday. “It underscores the importance of a selective approach to playing this year’s group of laggards.”

Stocks rebounded from a three-day slide on Wednesday and on track for another up day on Thursday on renewed trade optimism. The S&P 500 is on pace for its best annual performance since 2013.

“While the relative performance of laggards is in line with history, absolute performance is actually positive so far this year (+1% and +6% average and median, respectively), something that has happened just two other times since 2002,” said Meintel.

Energy and Discretionary laggards are down the most this year, underperforming the market by 32% and 30%, respectively, the analyst said.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: yun li
Keywords: news, cnbc, companies, strategy, beat, market, 500, westlake, stocks, 2019, trade, tends, armour, sachs, simple, chemical, goldman, laggard, laggards, early, performance


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Stocks at risk of 10% drop, but health care is a ‘win-win’: Matt Maley

The date is when the Trump administration plans to put through its next set of tariffs on Chinese goods if it can’t reach a trade deal with Beijing. With the market pricing in not just a pause in tariffs, but a rollback, Maley said the risks were still brewing. He warned that stocks could pull back by 4-6% even if the Dec. 15 round of tariffs were postponed instead of canceled. So it’s kind of a win-win situation, again, after a little bit of a breather on the near term.” On the trade front, Bap


The date is when the Trump administration plans to put through its next set of tariffs on Chinese goods if it can’t reach a trade deal with Beijing.
With the market pricing in not just a pause in tariffs, but a rollback, Maley said the risks were still brewing.
He warned that stocks could pull back by 4-6% even if the Dec. 15 round of tariffs were postponed instead of canceled.
So it’s kind of a win-win situation, again, after a little bit of a breather on the near term.”
On the trade front, Bap
Stocks at risk of 10% drop, but health care is a ‘win-win’: Matt Maley Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: lizzy gurdus, stephanie landsman
Keywords: news, cnbc, companies, market, winwin, stocks, standpoint, tariffs, care, risk, bapis, drop, deal, going, trade, maley, matt, health


Stocks at risk of 10% drop, but health care is a 'win-win': Matt Maley

Talk about a positive prognosis.

While stocks could fall as much as 10% if the United States and China are unable to reach a trade deal by a Dec. 15 tariff deadline, health-care stocks are poised to rally regardless of what happens, says Matt Maley, chief market strategist at Miller Tabak.

“The Number 1 thing that would really hurt the market and knock it down 10% would be that we get no deal and they do raise the tariffs on December 15th. That’s a low probability — I even put that below 20% — but people do need to keep that out there and consider it,” the strategist said Wednesday on CNBC’s “Trading Nation.” The date is when the Trump administration plans to put through its next set of tariffs on Chinese goods if it can’t reach a trade deal with Beijing.

With the market pricing in not just a pause in tariffs, but a rollback, Maley said the risks were still brewing. He warned that stocks could pull back by 4-6% even if the Dec. 15 round of tariffs were postponed instead of canceled.

While health-care stocks, tracked in part by the Health Care Select Sector SPDR Fund (XLV), didn’t exactly surge when the stock market was sent lower by U.S.-China trade issues in May and August, they’re in a better position to climb now that some of the political noise around the sector has softened.

“[Health-care] outperformed back then in those two months by going sideways, and that’s because it … had some of these political issues surrounding the Elizabeth Warren campaign. Those have been pushed to the side,” Maley said. “And, of course, we’ve seen a huge breakout in the XLV.”

“It’s broken well above its all-time highs,” Maley added. “It is a little overbought on a near-term basis, but I believe that it’s broken out so strongly that even after … it works off that overbought condition, it’s going to rally higher … if we do have a big scare on the tariff side. But it also should rally even if the whole market moves up. So it’s kind of a win-win situation, again, after a little bit of a breather on the near term.”

The XLV closed at $99.75 on Wednesday, up nearly 1% and opened flat on Thursday.

Michael Bapis, managing director with Vios Advisors at Rockefeller Capital Management, pointed out in the same “Trading Nation” interview that while stocks have “run up quite a bit” into year-end, people are staying invested for now.

“Everybody’s hanging on the last 15 to 25 days of the year to try to lock these returns in … if nothing gets messed up going into next year,” Bapis said.

On the trade front, Bapis gave a no-deal scenario less than 50% odds, saying it “would be a disaster” if it happened.

“I think what’s more likely to happen is a neutral to very positive scenario,” he said. “Neutral [is] where we come to some agreement of a deal: The details aren’t there yet, but we’ve moving in the right direction. Super positive would be a deal and no tariffs.”

In Bapis’ book, regardless of what happens, economic growth is still intact, monetary policy is still relatively easy and “the tax law easing is starting to take effect,” all of which puts stocks in a good position regardless of trade.

“If we can remove ourselves from just this one specific topic of … trade and tariff[s], as hard as it may be, we’re in a really good position from a market standpoint, earnings standpoint, earnings growth standpoint,” he said. “So, we will be watching December 15 or prior to, if something changes before then, and I think you’re going to see a lot of volatility up until that point and there may be even more volatility after.”

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: lizzy gurdus, stephanie landsman
Keywords: news, cnbc, companies, market, winwin, stocks, standpoint, tariffs, care, risk, bapis, drop, deal, going, trade, maley, matt, health


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US weekly jobless claims total 203,000, vs 215,000 expected

Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 203,000 for the week ended Nov. 30, the lowest level since mid-April, the Labor Department said on Thursday. Claims data tend to be volatile around holidays like last week’s Thanksgiving Day, which was later this year compared to 2018. The Labor Department said no states were estimated last week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out


Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 203,000 for the week ended Nov. 30, the lowest level since mid-April, the Labor Department said on Thursday.
Claims data tend to be volatile around holidays like last week’s Thanksgiving Day, which was later this year compared to 2018.
The Labor Department said no states were estimated last week.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out
US weekly jobless claims total 203,000, vs 215,000 expected Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: fred imbert
Keywords: news, cnbc, companies, week, fell, total, labor, market, 215000, level, weekly, department, unemployment, lowest, claims, 203000, jobless, expected, data


US weekly jobless claims total 203,000, vs 215,000 expected

The number of Americans filing applications for unemployment benefits unexpectedly fell last week, hitting their lowest level in seven months, suggesting the labor market remains solid even as the economy is slowing.

Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 203,000 for the week ended Nov. 30, the lowest level since mid-April, the Labor Department said on Thursday. Data for the prior week was unrevised.

Economists polled by Reuters had forecast claims increasing to 215,000 in the latest week.

Claims data tend to be volatile around holidays like last week’s Thanksgiving Day, which was later this year compared to 2018. This can throw off the model that the government uses to strip out seasonal fluctuations from the data.

The Labor Department said no states were estimated last week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,000 to 217,750 last week.

The claims data has no bearing on November’s employment report, which is scheduled for release on Friday. According to a Reuters survey of economists, nonfarm payrolls probably increased by 180,000 jobs in November, boosted by the return of about 46,000 striking General Motors workers. The 40-day strike had helped to hold job growth down to 128,000 in October.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: fred imbert
Keywords: news, cnbc, companies, week, fell, total, labor, market, 215000, level, weekly, department, unemployment, lowest, claims, 203000, jobless, expected, data


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Chart suggests a year-end market rally will emerge as soon as next week

The market could be on the verge of a year-end rally. Hickey builds his bullish case in a chart that shows the intramonth performance of the S&P 500. Stocks typically don’t break out into a sustainable year-end rally until around Dec. 14, according to Hickey’s data. But the S&P 500 is still down 1 percent, and the Dow is off almost 1.5%. Hickey points out the S&P 500 has already soared almost 25% this year surrounded by trade jitters.


The market could be on the verge of a year-end rally.
Hickey builds his bullish case in a chart that shows the intramonth performance of the S&P 500.
Stocks typically don’t break out into a sustainable year-end rally until around Dec. 14, according to Hickey’s data.
But the S&P 500 is still down 1 percent, and the Dow is off almost 1.5%.
Hickey points out the S&P 500 has already soared almost 25% this year surrounded by trade jitters.
Chart suggests a year-end market rally will emerge as soon as next week Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: stephanie landsman
Keywords: news, cnbc, companies, 500, month, market, soon, chart, suggests, trend, shows, hickey, stage, yearend, stocks, rally, emerge, week


Chart suggests a year-end market rally will emerge as soon as next week

The market could be on the verge of a year-end rally.

According to Bespoke Investment Group’s Paul Hickey, stocks generally stage their final push for the year in mid-December — even when the month starts off weak, as this one did.

“You would think you’d see strong performance throughout the month,” the firm’s co-founder told CNBC’s “Trading Nation” on Wednesday. “What we found is almost more so than any other month, December is a very back-end-loaded month, meaning the returns usually come towards the back half of the month.”

Hickey builds his bullish case in a chart that shows the intramonth performance of the S&P 500. He compares the current bull market to the overall trend between 1983 to 2018.

Since 1983, his chart shows December’s first two weeks often see muted returns. Stocks typically don’t break out into a sustainable year-end rally until around Dec. 14, according to Hickey’s data. That’s around the end of next week.

Even with last December’s plunge skewing the data, Hickey notes the historical trend is intact. So he’s confident the odds are in favor of a positive December despite the month’s choppy start.

“The market was extremely overbought heading into the month,” he said. “It was a healthy pullback. We didn’t see any major technical damage in the charts.”

The major indexes gained more than a half percent Wednesday and were pointing to higher opens on Thursday. But the S&P 500 is still down 1 percent, and the Dow is off almost 1.5%.

Hickey is confident stocks will rediscover upward momentum that will last into 2020.

He isn’t concerned climbing geopolitical risks, including the looming U.S. tariffs against China scheduled for Dec. 15, will disrupt the seasonal trend. Hickey points out the S&P 500 has already soared almost 25% this year surrounded by trade jitters.

Hickey cites a growing U.S. economy and a Federal Reserve keeping interest rates steady for his bullish outlook.

“These two positive things should set the stage for the market having a decent return,” Hickey said.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: stephanie landsman
Keywords: news, cnbc, companies, 500, month, market, soon, chart, suggests, trend, shows, hickey, stage, yearend, stocks, rally, emerge, week


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What GM leaving India means for US automakers

GM’s exit from India in 2017 was especially notable, in part because the massive country has a rising economy and growing automotive market. GM opened two factories in the country and introduced a number of products tailored to the value-conscious Indian buyer. To be fair, the Indian market is not easy for many foreign automakers to navigate. In the years since the automaker pulled out, the Indian market has slowed for the first time in years. Analysts expect the Indian economy to rebound in 202


GM’s exit from India in 2017 was especially notable, in part because the massive country has a rising economy and growing automotive market.
GM opened two factories in the country and introduced a number of products tailored to the value-conscious Indian buyer.
To be fair, the Indian market is not easy for many foreign automakers to navigate.
In the years since the automaker pulled out, the Indian market has slowed for the first time in years.
Analysts expect the Indian economy to rebound in 202
What GM leaving India means for US automakers Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: robert ferris
Keywords: news, cnbc, companies, economy, global, country, market, needed, leaving, india, electric, means, automakers, indian


What GM leaving India means for US automakers

General Motors is pruning businesses that don’t make money.

The largest U.S. automaker has shed operations in India, Western Europe and Russia in recent years, as it tries to boost profitability and free up cash needed to invest in automated driving technology, electric cars and other mobility businesses such as ride-hailing, which stand to take a bite out of traditional car ownership.

It is a move that bears resemblance to the trimming other automakers are making as they confront tough choices about where to put their money as global auto sales plateau and companies reckon with cash-hungry investments in electric cars and autonomous driving.

GM’s exit from India in 2017 was especially notable, in part because the massive country has a rising economy and growing automotive market. It is also relatively close to China, another expanding market where the company has been quite successful.

GM opened two factories in the country and introduced a number of products tailored to the value-conscious Indian buyer. The Chevrolet Beat, for instance, could be bought with the smallest diesel engine available in India at the time.

In spite of these efforts, GM watched its share of customers shrink from 4.7% in 2010 to about 1% in 2016.

To be fair, the Indian market is not easy for many foreign automakers to navigate. Entrenched players like Suzuki, which controls 50% of the market, have carved out niches offering fuel-efficient vehicles at low prices, and have been able to build the dealer and service networks needed to serve the diverse population.

The move may have been a smart one. In the years since the automaker pulled out, the Indian market has slowed for the first time in years.

“We explored many options, but determined the increased investment originally planned for India would not deliver the returns of other significant global opportunities,” a GM spokesman told CNBC.

Yet GM could find itself trying to reenter the market if the opportunity is right. Automakers have been known to return to markets they have previously left.

Analysts expect the Indian economy to rebound in 2021, around the time India is projected to surpass Japan as the world’s third-largest auto market.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: robert ferris
Keywords: news, cnbc, companies, economy, global, country, market, needed, leaving, india, electric, means, automakers, indian


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Why General Motors and Ford struggle in India

Why GM failed in IndiaOver the last 20 years the Indian automotive market has grown from about 500,000 new vehicles to 3.5 million in 2018. But some automakers have struggled to make it work. Among them is General Motors, the largest U.S. automaker. GM stopped selling cars in India in 2017, after years of declining market share. Watch this video to find out why automakers, including GM, struggle in India.


Why GM failed in IndiaOver the last 20 years the Indian automotive market has grown from about 500,000 new vehicles to 3.5 million in 2018.
But some automakers have struggled to make it work.
Among them is General Motors, the largest U.S. automaker.
GM stopped selling cars in India in 2017, after years of declining market share.
Watch this video to find out why automakers, including GM, struggle in India.
Why General Motors and Ford struggle in India Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05
Keywords: news, cnbc, companies, struggle, work, general, vehicles, market, watch, motors, video, india, automakers, ford, struggled


Why General Motors and Ford struggle in India

Why GM failed in India

Over the last 20 years the Indian automotive market has grown from about 500,000 new vehicles to 3.5 million in 2018. But some automakers have struggled to make it work. Among them is General Motors, the largest U.S. automaker. GM stopped selling cars in India in 2017, after years of declining market share. Watch this video to find out why automakers, including GM, struggle in India.


Company: cnbc, Activity: cnbc, Date: 2019-12-05
Keywords: news, cnbc, companies, struggle, work, general, vehicles, market, watch, motors, video, india, automakers, ford, struggled


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GM’s CEO deflects questions about Tesla’s Cybertruck, but sees electric pickups as significant

General Motors CEO Mary Barra said Thursday that she sees a big opportunity in all-electric pickup trucks — a new segment that’s gotten a lot of attention since Tesla’s splashy Cybertruck unveiling last month. Refusing to comment directly on the polarizing Cybertruck, she said, “It’s the customer’s decision to decide, not General Motors, certainly not me as the CEO.” GM’s electric pickup, expected in 2021, would get batteries from an Ohio factory that will be built as part of a new partnership b


General Motors CEO Mary Barra said Thursday that she sees a big opportunity in all-electric pickup trucks — a new segment that’s gotten a lot of attention since Tesla’s splashy Cybertruck unveiling last month.
Refusing to comment directly on the polarizing Cybertruck, she said, “It’s the customer’s decision to decide, not General Motors, certainly not me as the CEO.”
GM’s electric pickup, expected in 2021, would get batteries from an Ohio factory that will be built as part of a new partnership b
GM’s CEO deflects questions about Tesla’s Cybertruck, but sees electric pickups as significant Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, questions, ceo, deflects, market, sees, motors, significant, pickups, gms, truck, ohio, cybertruck, pickup, excited, teslas, trucks, electric


GM's CEO deflects questions about Tesla's Cybertruck, but sees electric pickups as significant

General Motors CEO Mary Barra said Thursday that she sees a big opportunity in all-electric pickup trucks — a new segment that’s gotten a lot of attention since Tesla’s splashy Cybertruck unveiling last month.

“That market can be very significant, and we’re excited in the not-too-distant-future to share what our entry will be,” Barra told CNBC’s Phil LeBeau in a “Squawk on the Street” interview.

Refusing to comment directly on the polarizing Cybertruck, she said, “It’s the customer’s decision to decide, not General Motors, certainly not me as the CEO.”

However, she added, “I couldn’t be more excited about our battery-electric truck. It capitalizes on all of our knowledge of trucks. So I’m excited to get the reaction from that.”

GM’s electric pickup, expected in 2021, would get batteries from an Ohio factory that will be built as part of a new partnership between GM and LG Chem to make battery cells for electric vehicles.

The Detroit auto giant and South Korea’s biggest chemical company said Thursday they plan to invest as much as $2.3 billion by 2023 to form the equally-owned joint venture.

But GM said early versions of the electric pickup will get batteries from a different LG plant until the Ohio facility is fully up and running.

Pickup trucks are one of the most profitable vehicle segments in the world, with the U.S. market largely dominated by GM’s Chevrolet Silverado and GMC Sierra, Fiat Chrysler’s Ram and Ford’s F-150.

Ford also intends to sell an electric F-series pickup truck in late 2021, Reuters reported.

— CNBC’s Michael Wayland and Reuters contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, questions, ceo, deflects, market, sees, motors, significant, pickups, gms, truck, ohio, cybertruck, pickup, excited, teslas, trucks, electric


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How White Claw and the hard seltzer craze are taking on beer—and taking over America

The growing influx of beer brands into the seltzer space might suggest that adult beverage makers might be worried about hard seltzer eclipsing the popularity of beer. Truly features one gram of sugar, verus two grams for White Claw and zero for Bon & Viv. “Many hard seltzers are low-carb, low-sugar — and they’re doing a really fantastic job at communicating that to consumers,” says Nielsen’s Kosmal. Hard seltzers can also provide a gluten-free alternative to traditional beers brewed with barley


The growing influx of beer brands into the seltzer space might suggest that adult beverage makers might be worried about hard seltzer eclipsing the popularity of beer.
Truly features one gram of sugar, verus two grams for White Claw and zero for Bon & Viv.
“Many hard seltzers are low-carb, low-sugar — and they’re doing a really fantastic job at communicating that to consumers,” says Nielsen’s Kosmal.
Hard seltzers can also provide a gluten-free alternative to traditional beers brewed with barley
How White Claw and the hard seltzer craze are taking on beer—and taking over America Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: tom huddleston jr
Keywords: news, cnbc, companies, beer, hard, market, taking, brands, america, brand, light, claw, seltzer, craze, beerand, white, seltzers


How White Claw and the hard seltzer craze are taking on beer—and taking over America

It was hard to look anywhere on social media this summer without seeing someone grasping a can of the sparkling, sparsely flavored, adult beverage sensation called White Claw. The best-selling hard seltzer on the market, which comes in flavors like black cherry and ruby grapefruit, exploded onto the drinking scene like a freshly-shaken carbonated beverage during the warmer months of 2019, a period dubbed “White Claw Summer.” In fact, this summer saw such a popularity spike for the spiked seltzer that the brand, which was first launched by Mike’s Hard Lemonade manufacturer Mark Anthony Brands in 2016, declared a nationwide shortage of White Claw in September amid increased demand that White Claw said was outpacing supply. Sales of White Claw are up roughly 250% in 2019 compared to the previous year, according to data from Nielsen, with the brand saying in October that White Claw had already seen retail sales of $638 million this year, and the brand now says it can top $1.5 billion in sales by the end of 2019. “The momentum continues to build,” Sanjiv Gajiwala, White Claw’s senior vice president of marketing, tells CNBC Make It Those numbers represent a large chunk of overall hard seltzer sales, a market segment that’s tripled over the past year-long period (ending Nov. 2), growing more than 202% from the previous year to top $1.3 billion, according to Nielsen. Rival brands such as Truly, owned by Sam Adams brewer Boston Beer Company, and Anheuser-Busch’s Bon & Viv — which was announced as the official hard seltzer sponsor of the NFL in August — have also seen surging sales this year, riding the same sparkling wave of hard seltzer popularity as White Claw. Meanwhile, the increasing popularity of hard seltzers also has more and more giant companies looking to jump into the market. The MillerCoors-owned Henry’s Hard Soda brand rolled out a line of flavored Hard Sparkling drinks in 2017. And, in addition to selling Bon & Viv Spiked Seltzer, beer giant Anheuser-Busch is moving on the hard seltzer crowd with a full head of steam, as its Budweiser brand officially announced a line of Bud Light Seltzer in various flavors (like Strawberry and Mango) in November. That announcement came about three months after another big Anheuser beer brand, Natural Light, unveiled its own of alcoholic seltzers in flavors like “Catalina Lime Mixer.”

Anheuser-Busch had seen success with its Bon & Viv brand, and the huge upswing of interest in hard seltzer this past summer convinced the company to look for other ways to tap into the hard seltzer market with their existing brands like Natural Light and Budweiser, Ricardo Marques, vice president of marketing for core and value brands at Anheuser-Busch, tells CNBC Make It. “We saw a tremendous opportunity to bring our Natural Light brand to disrupt and to challenge and help build this very interesting segment in the beverage industry,” Marques says. The growing influx of beer brands into the seltzer space might suggest that adult beverage makers might be worried about hard seltzer eclipsing the popularity of beer. Overall, though, hard seltzer sales still only represent around a 2.8% share of the total market for beers, alcoholic ciders and flavored malt beverages (the latter of which includes drinks like White Claw, which is brewed, and taxed, like beer), according to Nielsen. That being said, Danelle Kosmal, vice president of Nielsen’s beverage alcohol practice, tells CNBC Make It that hard seltzer’s share of the market spiked to roughly 5% over the summer, and the beverage’s surge is helping to spur growth overall in what would otherwise be an “essentially flat” beer category this year.

Why seltzer?

So, what’s behind the hard seltzer craze, both among consumers and brand executives? As with many other food and beverage trends — from nondairy milk to plant-based meats — the increase in the number of health conscious consumers seems to be a primary driver for the rising interest in hard seltzer. A 12-ounce can of either White Claw, Truly or Bon & Viv comes in at 100 calories, or less — which is less than most beers, and even less or comparable to most light beers (Miller Lite clocks in at 96 calories per 12 ounces, while Bud Light is 110 calories). The hard seltzers also boast fewer carbohydrates, with each of those three leading brands coming with two grams of carbs. A 12-ounce serving of Bud Light has 6.6 grams of carbs, while Coors Light has five grams and Miller Lite is among the lightest options at 3.2 grams. What’s more, even though White Claw is brewed with fermented sugars, the drink is still far from carrying a heavy sugar load when compared to other hypersweet beer alternatives on the market, including Mike’s Hard Lemonade (32 grams of sugar per bottle) or Smirnoff Ice (33 grams). Truly features one gram of sugar, verus two grams for White Claw and zero for Bon & Viv. Meanwhile, most hard seltzers range between 4% and 6% of alcohol content, which also makes them comparable to drinking a can or bottle of beer as far as drinkers are concerned. “Many hard seltzers are low-carb, low-sugar — and they’re doing a really fantastic job at communicating that to consumers,” says Nielsen’s Kosmal. Hard seltzers can also provide a gluten-free alternative to traditional beers brewed with barley and wheat that contain gluten.

Riding the (non-alcoholic) seltzer wave

LaCroix Sparkling Water at the EcoLuxe Lounge in Park City, Utah. Vivien Killilea | Getty Images Entertainment | Getty Images

Of course, the rise of hard seltzers in the beer category is also just a reflection of the broader surge in popularity of non-alcoholic flavored seltzers evidenced by the sudden and massive popularity of brands like LaCroix and Spindrift, while beverage giants have flooded the seltzer market with their own new flavored seltzer brands in recent years, from PepsiCo’s Bubly to Coca-Cola’s new caffeinated AHA brand. Seltzers have been a popular drink choice for consumers looking to lead a healthier lifestyle since the 1980s, according to Barry Joseph, the author of “Seltzertopia,” a 2018 book chronicling the history of seltzer. But the trend really started gaining more traction in the popular conscience in recent years with the explosion of interest in brands like LaCroix from millennials and on social media, Joseph tells CNBC Make It. “A few years ago is when people started really pushing flavored seltzers in a new way and found new ways to market them to millennials and using tools like social media to find new audiences and new markets,” Joseph says. “In many ways, it was redefining what seltzer meant for a new generation….” Now, just like LaCroix and other nonalcoholic seltzer brands found an eager consumer base waiting for more soda alternatives (U.S. soda sales have dipped in recent years, while seltzer sales grow at a double-digit rate annually, according to Nielsen), hard seltzers are tapping into the beer market on account of consumers looking for healthier alcoholic options. And while Nielsen’s Kosmal contends that hard seltzer is being enjoyed by drinkers of all ages, “we do tend to see it and hear a lot more from millennials and the legal drinking age Gen Z-ers that it’s more important for them,” she says. That’s certainly the age demographic that Anheuser Busch was looking to target, first with its Natural Light hard seltzer (which has sold over 480,000 cases since launching in August) and later the Bud Light version. Anheuser Busch’s Marques tells CNBC Make It that Natural Light was already a brand with “a ton of affinity with a millennial drinker that is at the eye of the hurricane of the seltzer movement.” The target demographic for Natural Light Seltzer is between the ages of 21 and 29, the brand tells CNBC Make It. In the case of White Claw, the brand’s reputation for being popular with younger drinkers, especially millennials, definitely received a boost from a particularly strong social media presence that’s spawned widespread internet memes and a parody video that’s garnered over 3.2 million views on YouTube since June. White Claw’s Gajiwala credits the brand’s more recent explosion, particularly online, in part to the fact that the company ramped up distribution of White Claw to more retailers this year. The brand then caught on at social media friendly events like the Kentucky Derby in May, where White Claw was a sponsor, and at April’s Coachella music festival, where the drink was dubbed a “rising star” by The Wrap. By the middle of the summer, even Gajiwala was taken aback by how popular White Claw had become. One weekend in mid-July, he says he was spending time with his in-laws when his phone kept blowing up with messages from friends and family sending him popular White Claw memes. “It felt like everyone was talking about the brand at one time, which was crazy to see and so exciting to have, like, my friends and people I hadn’t talked to in years send notes,” he says.

Hard seltzer’s ‘mass appeal’


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: tom huddleston jr
Keywords: news, cnbc, companies, beer, hard, market, taking, brands, america, brand, light, claw, seltzer, craze, beerand, white, seltzers


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