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“No man becomes rich unless he enriches others.” – Andrew Carnegie
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Following a Friday rebound on the back of comments from NY Fed President John Williams that he was open to a rate cut at the December meeting, the week is starting on a positive note. S&P 500 futures have rallied 0.5% while Nasdaq futures point to a gain of 0.76% as shares of Alphabet (GOOGL) trade up another 3% following comments from Marc Benioff saying how much better Gemini 3 is than ChatGPT and that he’s ‘not going back’.
Japanese stocks were closed for a holiday, but Hong Kong stocks surged 2% while South Korean stocks declined modestly in what was a generally quiet session to start the week. European stocks are generally off to a quiet start this week as well. The STOXX is basically unchanged, while Germany (0.5%) leads and Italy (-1.0%) lags. One major weakness in the region, though, is the defense sector, as a potential end to fighting in the Ukraine war has that sector selling off. In terms of data, it’s been quiet. The only report was German Business confidence from ifo, which showed an unexpected decline from October, falling from 88.4 to 88.1 versus forecasts for an uptick to 88.6.
With the market only open for trading three-and-a-half days this week, it’s one of the shortest trading weeks of the year. With many on Wall Street usually taking Friday off, it’s only a three-day work week for many. It may be short, but Thanksgiving week has historically been strong. Since 1945, the S&P 500’s median performance during the week has been a gain of 0.76% with gains 65% of the time.
This year is the 38th time since 1945 that the S&P 500 was up by double-digit percentages heading into the week, and in the 37 prior years, the S&P 500’s median gain for Thanksgiving week was even stronger at 0.91% with positive returns 70% of the time. There have also been 13 years when the S&P 500 was down by double-digit percentages heading into Thanksgiving week. While you wouldn’t expect that investors would have had much to be thankful for in those years, the S&P 500’s median gain during the holiday week was a gain of 1.55% with positive returns 85% of the time.
As shown in the chart below, recent Thanksgiving week performance have also been positive. In the last three years, the S&P 500 rallied more than 1% in each Thanksgiving week, and it’s been positive during this week in eleven out of the last 13 years.
Looking at day-to-day returns, the chart below shows the S&P 500’s average performance during each day of Thanksgiving week for all years since 1945 and years when the S&P 500 was up 10%+ YTD. For all years since 1945, the strongest days of the week have been Wednesday and Friday (maybe you want to reconsider taking Friday off!), but in years when the S&P 500 was already up by double-digits, Tuesday and Wednesday were the best days of the week. One constant trend for Thanksgiving week? Monday was the weakest in terms of performance for all years and just years when the S&P 500 was already up 10%. What would you expect for a Monday?
