This week, US stocks will close on Thursday (Nov. 24) and close three hours earlier on Friday (Nov. 25) due to the Thanksgiving holiday. Despite the shortened trading hours, US stocks typically rise during the week of Thanksgiving.
US stocks are more likely to rise during Thanksgiving
Over the past 50 years, the $S&P 500(.SPX)$ has risen an average of 0.54% during Thanksgiving week, with a 68% probability of an increase.
By comparison, the other weeks have averaged a 0.16% gain, with a 56% probability of an increase.
data from bloomberg
Historically, over the past 50 years, the top performers of the week during Thanksgiving week have been the day before and the day after Thanksgiving.
- There is a greater probability of a decline than an increase on Monday.
- Tuesday has a 62% probability of being up, recording a slight decrease on average.
- The Wednesday before Thanksgiving has a 78% probability of being up for the S&P 500, with an average gain of 0.3%.
- The day after Thanksgiving has an average return of 0.22% and has a 66% probability of gaining.
It is also worth noting that volatility is significantly lower than normal for the rest of the Thanksgiving week, with the exception of Monday.
data from bloomberg
By industry
Over the past 10 years, the top industries in terms of average returns during Thanksgiving week are:
household goods and construction, auto parts, travel and leisure, technology hardware and equipment, beverages, personal products, food manufacturers, health care, retailers, pharmaceuticals and grocery stores.
As Thanksgiving kicks off the travel and holiday shopping season, three sectors - travel and leisure, personal goods, and retailers - are more likely to benefit directly.
Oil stocks and utilities are not popular at this time of year. Some investors may short one of these sectors or stocks.
data from bloomberg
By stocks
Here is a list of the best-performing S&P 500 components for the past 10 years on Thanksgiving week.
$Kimberly-Clark(KMB)$ tops the list, having performed well during Thanksgiving each year for the past 10 years.
Several personal care stocks also made the list, including $Church & Dwight(CHD)$ and $Clorox(CLX)$ .
data from bloomberg; The chart above is sorted first by probability of gain and then by average return
The worst performing stocks during Thanksgiving for the past 10 years are energy companies.
$FirstEnergy(FE)$ $Exelon(EXC)$ $Newmont Mining(NEM)$
data from bloomberg
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