The Stock Market's Thanksgiving Week Distress Might Be Just Starting
Investors might have another thing to worry about at the Thanksgiving dinner table this year, besides having to eat all that food.
Two days into the week, both the Dow Jones Industrial Average and S&P 500 have had their worst start to Thanksgiving week since 1973. The S&P 500 is currently down 3.45% for the week. Forty-five years ago, it fell 5.03%.
Historical data suggest it might not get any better for the rest of the week.
In the 35 years following 1952, the Dow always saw positive returns from the Wednesday before Thanksgiving to the Friday after, except for two years: 1964 and 1965.
Since 1988, however, the index has gained only 18 out of 30 times during those two days-just a little better than a coin flip.
Things are even worse for the following Monday, so-called Cyber Monday. From 1952 to 2017, the Dow was up only 27 out of 65 years, a pretty bleak track record. The worst year-2008, in the midst of the financial crisis-saw the Dow’s market cap evaporate 7.7% in one day.
Interestingly, in that brutal year, the market showed some mercy Thanksgiving week. The Dow increased on Tuesday, Wednesday and Friday. It wasn’t until the next Monday when another round of volatility hit the market.
Unless things turn around suddenly, it seems there will be no such mercy this year.
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