Analyst: Holiday spending down from last year

A customer is seen shopping in a Toys-R-US store in Fairfax, Virginia.
Paul J. Richards | AFP | Getty Images

Holiday retail sales are off to a dreary start, according to the latest credit card data from Wall Street.

Bank of America Merrill Lynch's Lorraine Hutchinson on Thursday cited internal credit card data from her parent company in coming to this conclusion.

She wrote in a report:

"Based on aggregated BAC (Bank of Amercia) credit and debit card spending data, early holiday sales fell 1.2 percent year over year, the first decline since the recession. ... We think the card data underscores the challenges facing retailers this year, which have been exacerbated by unseasonably warm weather. We expect comp deceleration from last year for traditional retailers, driven by a deflationary retail environment, elevated promotional activity, and pressures from new tech products and online competitors."

The firm defines the "early holiday sales" period as the three weeks ending in Black Friday. And the analyst tries to isolate holiday spending by tracking retail sales ex-food services, automobiles, gasoline and building materials.

Here are the results by category and what stocks the firm recommends to buy and avoid...

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