Bulls return to kick off holiday season

  • Tech and consumer highlight market rebound, retail sales surprise to upside
  • Oil slides, gold glides, energy and materials sectors dip
  • This week: Fed inflation gauge, FOMC minutes, more retail earnings

The stock market enters a busier-than-you-may-think Thanksgiving week in rebound mode, with the S&P 500 (SPX) bouncing back from its first down week since the beginning of October.

It wasn't an overwhelming victory for the bulls, though. The SPX set a new record close on Thursday, but posted only a modest gain for the week, slipping quietly into the weekend with a small loss on Friday:

Chart 1: S&P 500 (SPX), 10/11/21–11/19/21. S&P 500 (SPX) price chart.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)

The headline: Stocks bounce back as earnings season winds down and holiday season gears up.

The fine print: Retail earnings may have been the focus last week, but tech ended up stealing the show—especially on Thursday, when chipmaker Nvidia (NVDA) jumped more than 8% after releasing its numbers, helping propel the PHLX Semiconductor Index (SOX) and the Nasdaq 100 index (NDX) to  record highs. On the other side of the ledger, the materials sector was one of the week’s underperformers, even though President Biden signed the infrastructure bill into law last Monday. 

The number: 4, the number of consecutive weeks crude oil prices have fallen—the longest such streak since March 2020.

The scorecard: It was a split decision for the major indexes—the Nasdaq 100 (NDX) joined the SPX in the plus column, while the Russell 2000 (RUT) and the Dow (DJIA) lost ground for the week:

US stock index performance table for week ending 11/19/20. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Sector roundup: The strongest S&P 500 sectors last week were consumer discretionary (+3.8%), information technology (+2.4%), and utilities (+1%). The weakest sectors were energy (-5.4%), financials (-2.9%), and materials (-2%).

Highlight reel: Dicerna Pharmaceuticals (DRNA) +79% to $38.03 on Thursday, Aurora Innovation (AUR) +51% to $17.11 on Friday. On the downside, Telos (TLS) -28% to $17.54 on Monday, StoneCo (STNE) -35% to $20.7 on Wednesday.

Futures action: December gold (GCZ1) tagged a five-month high of $1,879.50/ounce last Tuesday but closed Friday at the bottom of its recent consolidation at $1,848.20/ounce. A sharp Friday sell-off dropped slumping January WTI crude oil (CLF2) to a six-week intraday low of $75.09/barrel. Biggest up moves: January lumber (LBSF2) +28.1%, March oats (ZOH2) +6.3%. Biggest down moves: November bitcoin (BTCX1) -10.2%, November ether (ETX1) -8.8%.

Coming this week

US markets will be closed on Thursday for Thanksgiving, but don’t forget that US stock exchanges will also close early on Friday. This week’s numbers include:

Monday: Chicago Fed National Activity Index, Existing Home Sales
Tuesday: Markit PMI Flash
Wednesday: Durable Goods Orders, Goods Trade Balance (advance), Wholesale and Retail Inventories (advance), GDP (2nd estimate), Personal Spending and Income, PCE Price Index (Fed inflation), New Home Sales, Michigan Consumer Sentiment (final), FOMC minutes
Thursday: Thanksgiving
Friday: Black Friday (US stock exchanges close at 1 p.m. ET)

Like last week, this week’s earnings calendar is heavy on retail, with a side dish of tech:

Monday: Zoom Video (ZM), Keysight (KEYS), Agilent (A), Urban Outfitters (URBN)
Tuesday: J.M. Smucker (SJM), HP (HPQ), Analog Devices (ADI), Best Buy (BBY), Dollar Tree (DLTR), Burlington Stores (BURL), Dick's Sporting Goods (DKS), Nordstrom (JWN), Gap (GPS)
Wednesday: Deere (DE), Futu (FUTU)
Friday: Pinduoduo (PDD)

This week’s IPOs include: Nuvectis Pharma (NVCT)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Turkey trading

Thanksgiving—the gateway to the holiday season, and the final stretch of the trading year. As noted in “Another inflation dip for stocks,” over the past 15 years the US stock market has tended to gain more ground the month after Thanksgiving than the month before it. And based on even longer-term statistics, Thanksgiving week has, on average, been anything but down time for stocks—even though it now consists of only three-and-a-half trading days.

For starters, between 1950 and 2019 the SPX moved almost as much (+/-1.5%, on average) during the short Thanksgiving trading week as it did during the average five-day trading period (+/-1.6%). The market has also had some noticeable short-term tendencies around the holiday itself:

1. The SPX closed up the day before Thanksgiving 54 out of 70 years (77% of the time).
2. The SPX closed up the day after Thanksgiving (Black Friday) in 50 years (71% of the time).
3. The SPX closed down the Monday after Thanksgiving in 43 years (62% of the time).1

All those numbers are significantly different from the SPX’s 53% long-terms odds of closing higher on any given day:

Chart 3: S&P 500 around Thanksgiving: percentage of higher closes (1950–2020). Unusual activity around Thanksgiving.

Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Last year the index went two-for-three: Although it didn’t rally the day before Thanksgiving, it did on Black Friday, and it declined the following Monday. Also, it gained 2.3% Thanksgiving week—more than it did in all but four other weeks over the past year. And retail stocks performed even better than the broad market during Thanksgiving week—the S&P retail sector has rallied 10 of the past 15 Thanksgiving weeks (and seven of the past 10), rallying 2%, on average.

Along with a busy economic calendar, such numbers may give traders a good reason to stay tuned in to the market this week.


Click here to log on to your account or learn more about E*TRADE's trading platforms, or follow the Company on Twitter, @ETRADE, for useful trading and investing insights.

1 Reflects S&P 500 (SPX) daily closing prices, 1/2/50–12/31/20. “Thanksgiving week range” was calculated as the absolute percentage change in the SPX from the Friday before the holiday to the Friday after it. Supporting document available upon request.

What to read next...

Niche transport stock with footprint in a different type of electric vehicle space tests recent breakout.

This stock didn’t do much on Wednesday, but its options were a different story.

Looking to expand your financial knowledge?