With Memorial Day right around the corner, we wanted to look at how the S&P 500 has historically performed leading up to the first unofficial weekend of summer. While the day to honor the sacrifice of Americans who have died while in service of the US military was historically observed on May 30th, beginning in 1971, Memorial Day was moved to the last Monday of May. With Memorial Day falling on the 27th of May this year, it’s on the earlier side (earliest it can be is May 25th while the latest is the 31st). Also, as an added bonus, because of the way the calendar falls this year, there are 15 weeks between Memorial Day and Labor Day versus the traditional 14. So while it may have been a lousy spring for many areas of the country this year, look on the bright side: at least we’ll get an extra week of summer!
In terms of market returns, the S&P has tended to see modestly positive returns in the week leading up to Memorial Day, averaging a gain of 0.15% (median: 0.23%) with positive returns 62.5% of the time. Relative to all one week periods, those returns are slightly better than average but nothing to a significant degree. More recently, though, the returns have been a bit better. In the ten years since the lows of the Financial Crisis, the S&P 500 has seen an average gain of 0.65% (median: 0.39%) during the week leading up to Memorial Day weekend with positive returns in all but two years. Start a two-week free trial to Bespoke Institutional to access our seasonality tools and so much more.