The stock market will be closed on Friday, April 7, 2023, on account of Good Friday. Keep track of all stock market holidays with TipRanks’ Stock Market Holidays calendar.
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What Is the Holiday Effect?
Understanding how the stock market might be affected by the holiday season will help you invest well and beat the markets. Investors sometimes refer to a pre-holiday market aberration as the “holiday impact.” This is because the penultimate trading day before a scheduled long weekend or holiday is when the stock market typically surges.
The holiday impact is linked to investors’ general optimism and confidence. The fact that customers tend to spend more money around the holidays is another essential explanation for the market surge. The share prices of retailers, in particular, may increase as a result.
Many traders and market analysts take time off work during the holidays to relax from their regular trading and research schedules. Those investors view the holidays as a time to unwind and refresh. On the other hand, some traders see the season as a chance to work harder and get some tactical advantages in the market, maybe by taking advantage of the period when many other traders take holidays. Understanding the holiday impact will help you get through it, no matter what sort of investor you are.
Good Friday Could be a Good Day for Stocks
Even though Good Friday is neither a recognized government holiday in the United States nor a typical bank holiday, markets are closed this Friday before Easter. Many international markets close on this day, including those in the United States, such as the New York Stock Exchange, the Nasdaq Exchange, and the Chicago commodities exchange.
The Stock Market will often rise in the weeks following Good Friday and Easter Sunday. In 18 of 30 (60%) occurrences since 1989, the S&P 500 (SPX) has seen a positive return the week after Easter Sunday, with an average weekly return of 0.34%. In a similar vein, the S&P 500 has often had favorable returns in the month immediately after Easter.
Although Wall Street customs predict that the market will trend upward as we approach Easter weekend, the data is inconclusive. The market may have a slight “up-down-up” tilt on the Thursday before Good Friday and the Monday and Tuesday that follows. However, it is impossible to forecast how the market will perform in any given year. Therefore, trading decisions should not be based solely on “normal Easter trends.”
Watch this space to see Good Friday’s pre and post-holiday effect on the stock market. And remember to always use TipRanks to stay up-to-date on your stock research.
