If history is any guide, don’t expect stocks to perform well on Monday.
Black Friday is this week and investors are looking for signs of continued strength in consumer spending as the economy recovers from the pandemic-induced recession. Indications that people are more willing to open their wallets have been cropping up in retailers’ earnings reports and retail-sales data. A strong start to holiday shopping would help to confirm the rebound.
Holiday spending “is one of my key catalysts that I’m looking for in this quarter,” said Lindsey Bell, chief investment strategist at Ally Invest. “I want to know what the consumer spends this holiday season.”
Historical market moves indicate investors tend to be disappointed. Stocks fall more often than not on the Monday after Black Friday.
The average move in the
that day is a loss of 0.4%, based on figures going back to 1985, Barron’s found. The median move is down 0.14%. The worst loss was to the tune of 8.9%. on Dec. 1, 2008, as regulators and central banks struggled with the 2008-2009 financial crisis.
In 14 of the 35 years, Cyber Monday brought a gain in the S&P 500. The highest was a surge of 2.9% on Nov. 28, 2011.
This Monday could go into the loss column if the market continues to retrace its moves following a hefty gain at the start of the week. The S&P 500 closed down 0.2% on Wednesday after gaining more than 2% over Monday and Tuesday, partly because
(ticker: AZN) disclosed encouraging data on its Covid-19 vaccine.
The company is the third vaccine maker to indicate it is close to distributing its vaccine. The more inoculations can be delivered, the faster states, local governments, and other countries can lift restrictions that have hurt employment and economic growth.
Any weakness in the next few days could give way to gains for December, which is one of the stronger months of the year for stocks, historically. The average move on the S&P 500 for December is a gain of 1.3% dating back to 1928, according to Yardeni Research. That’s the fourth-highest gain among the nine months of the year that have posted gains on average.
The keys for stocks to finish out 2020 with strength are for hopes of fiscal stimulus to sty alive, and for vaccine approvals to remain on track.
Write to Jacob Sonenshine at email@example.com
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