Holiday prep: The market’s Thanksgiving patterns
- Thanksgiving week often more bullish than average
- Specific days exhibited distinct bullish and bearish tendencies
- Sectors show post-election momentum shift
With markets knocking on the door of the holidays, it’s a good time to catch up on one of its short-term seasonal patterns.
Given November has historically been one of the stronger months for the stock market, it may not be surprising that the market has tended to be in a giving mood around the Thanksgiving holiday. While the SPX had a positive return in 56% of weeks since 1960, it gained ground in 69% of Thanksgiving weeks, including 14 of the past 20 and eight of the past 10.1
In fact, since 1960, the S&P 500’s (SPX) median return for Thanksgiving week has been around two-and-a-half times its median return for all weeks:
Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest directly in an index.)
What makes this outperformance even more impressive is that Thanksgiving week has never had more than four trading days, and more recently it’s been closer to three-and-a-half days, since the market now closes at 1 p.m. ET on Black Friday.
That historical tendency may be the main course, but Thanksgiving also provides a few interesting seasonal side dishes. While the SPX has closed higher on 53% of all days since 1960, its performance just before and after the holiday has been far from typical:
1. The SPX closed up the day before Thanksgiving in 49 of 64 years (77% of the time).
2. The SPX closed up the day after Thanksgiving (Black Friday) in 44 years (69% of the time).
3. The SPX closed down the Monday after Thanksgiving in 41 years (64% of the time).
Last year the SPX went three for three, closing higher the day before and after the holiday, and falling the following Monday. Also, the SPX posted a net gain for the final four trading days before Thanksgiving in 40 of the past 64 years.
But it’s worth noting the SPX posted sizable losses in its three most recent negative Thanksgiving weeks, falling 2.2% in 2021, 3.8% in 2018, and 4.6% in 2011.
Market Mover Update: The major indexes may have given back the majority of their post-election gains, but the story is much different at the sector level. As of Wednesday, the top-performing S&P 500 sectors since the election were consumer discretionary (+7.8%), financials (+7.1%), and energy (+6.8%). The weakest sectors were health care (-2.6%), materials (-1.2%), and real estate (+0.6%).
Morgan Stanley & Co. analysts think there are still many unanswered questions regarding the new administration’s policies, but they also see some “signal” amid the noise for investors—specifically, a regulatory environment that may continue to support the financial sector (see Decoding Signals Following the U.S. Election”).
Today’s numbers include (all times ET): weekly jobless claims (8:30 a.m.), Philadelphia Fed Manufacturing Index (8:30 a.m.), Existing Home Sales (10 a.m.), Leading Economic Indicators (10 a.m.), EIA Natural Gas Report (10:30 a.m.).
Today’s earnings include: BJ's Wholesale Club (BJ), Deere & Co. (DE), Copart (CPRT), Gap (GAP), Intuit (INTU), Ross Stores (ROST).
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 All figures reflect S&P 500 (SPX) daily and weekly prices, 1960-2024. Supporting document available upon request.