Our US readers will have a shorter week with the markets closing on Thursday, followed by half a day of trading Friday. Of course, crypto markets continue trading through the holiday. We’ll take a closer look at US equity markets and how they typically do this time of the year to see what could happen.
In the past, historically stocks have done well in the week following Thanksgiving. Since 1928, the S&P 500 has finished higher 60% of the time following the holiday. Returns are more frequent during presidential election years. The index is higher in 75% of cases, and has an average of 0.8% according to Bank of America Global Research.
Nasdaq, founded in 1971, generally follows suit. In 2011, the Nasdaq Composite finished Thanksgiving week with a 2.4% gain, adding to a strong month. The Dow Jones Industrial Average and S&P 500 also closed the week ended Black Friday 2023 higher, posting gains of 1.9% and 2.2%, respectively.
The global currency market was rocked by Donald Trump’s recent comments about his proposed tariff plan. Trump announced in a Truth Social blog post on Tuesday that he would impose 25% tariffs on imports to the United States and Canada plus an additional 10% tax on products from China. Both the Canadian dollar and Mexican Peso fell dramatically against the US dollar.
Midway through Tuesday’s session, the S&P 500 was up 0.3% since the start of the week while the Nasdaq Composite was virtually flat.
Stocks were largely insulated from Trump’s comments — likely an indication that investors are going to hold off on making major trades until they have more information about what the Trump Administration might actually do after Inauguration Day. The S&P 500 and Nasdaq Composite indexes were trending 0.4% and 0.5% higher, respectively, over the day at 2 pm ET.
Stocks should finish November in the black if the upward trend is maintained. The S&P 500 and Nasdaq Composite indexes are both up close to 5% since the first of the month.
Markets will be influenced by tomorrow’s economic report, or the expectations that interest rates may drop in December. The initial jobless claims will be released at 8:30 AM ET and the PCE Index for October at 10:00 AM. Data from CME Group shows that the odds of a rate cut by 25 basis point next month have increased to 59%. (This is up from just 52% one day earlier).
One and a quarter trading days are left (plus one hour for today’s session). We hope that the rally will last.
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