How the S&P 500 has historically performed over Thanksgiving

Average returns have been positive for the S&P 500

Using daily data of the S&P 500 (via Refinitiv) we have analysed percentage returns the day before and after Thanksgiving. As the public holiday lands on the fourth Thursday of November each year, it means we’ll look at returns on the Wednesday before and Friday following it.

Since 1957, the S&P 500 has produced an average return of 0.34% the day ahead of Thanksgiving. It has also closed higher on 64.5% of the time, with a maximum gain of 3.5% and maximum loss of -2.1%. On the face of it, these numbers look pretty good.

Returns were more consistent on the S&P 500 in earlier years

However, if you look at the chart above you should notice that between 1965 – 1992 the positive relationship was much more apparent, as it only closed lower on 5 sessions over this period. It also posted a positive return on 22 consecutive occasions between 1965 and 1987 (although the 1987 crash may have had something to do with that eventual, pre-Thanksgiving, down-day)

Since 2000, it has posted an average return of 0.23% with a 66% win rate. Therefore, whilst average returns have diminished in recent years it still seems to have a positive expectancy overall. On a side-note, volatility has also diminished in recent years with the trend for the daily high-low volatility sloping lower.

The S&P 500 the day after – party on

Since 1957, the S&P 500 has posted an average daily return of 0.3% the trading day after Thanksgiving. It has also closed higher 65.2% of the time, although once again positive returns were more apparent between the 60’s and 90’s.

Summary

S&P 500 has posted positive average returns the day before and after Thanksgiving
Positive returns were more consistent between the 1960s – 1990s
Daily volatility on these days have been trending lower over the years

Maybe this time it will be different

Whilst the odds have favoured a positive expectancy overall, it does not provide a roadmap to futures gains. And each new data point is independent from the set it is within. So it’s important to use price action as a guide.

Besides, the S&P 500 printed a bearish engulfing candle on the daily chart yesterday with above-average volume, at its record high. So we go into today’s session with a bearish bias whilst prices remain below the 4700 area, which could be a key focal point for intraday traders today early in the session.

Take note that US stock markets are closed on Thursday for Thanksgiving, and close early on Friday 1pm EST.

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.