By Rocky White
It's Thanksgiving week. We know to expect some pretty low volume during the four-day trading week, but what can we expect as far as returns? This week I'll look at the last 20 years to see how the market has behaved, and I'll also find some stocks that tend to do well during the holiday week.
Thanksgiving Over the Past 20 Years: The table gives a quick summary of how the S&P 500 Index and SPY ETF have performed during Thanksgiving week over the past 20 years. In a nutshell, the index logs a higher average return, but the median return is lower while the percent positive is the same.
In this next table, I broke down those 20 returns depending on how the market was doing for the month of November when heading into the week. The market is currently down around 4% for the month. This does not bode well for this week.
While the average return is higher if November is negative heading into the week, that's mainly because of one very large return during the very volatile time in late 2008, when the SPX was down 17% heading into Thanksgiving week. The market gained 12% the week of Thanksgiving that year. Take out that return and the index averages a loss of 1.25%. However, even including that return, the median return is a 1.24% loss, with only three of the seven returns positive.
By Day of the Week: I broke down the Thanksgiving week returns by weekday. Thursday, of course, isn't a trading day. As you can see below, the week typically gets off to a slow start. Monday is the only day of the week that is positive less than half the time, and then Tuesday is the only day that averages a negative return.
The day before Thanksgiving and the day after have been pretty bullish, each averaging a gain of more than 0.2% and both have been positive 65% of the time. I also show typical returns for each day of the week, for comparison.
Individual Stocks: Finally, below is a table showing which stocks have done well during the past 10 Thanksgiving weeks. Those top six stocks (bolded) have been positive during the week in nine of the last 10 years. The rest are the ones with the best average return that have been positive eight times.
There aren't any turkey producers on the list, but there are quite a few retail names and apparel companies, as well as Apple Inc. (AAPL). Maybe those are investors buying up stocks they expect to have a strong Christmas season?
