Market Quiescence In Thanksgiving: U.S. stock markets remained relatively flat on Monday, experiencing thin trading in anticipation of the upcoming Thanksgiving holiday. In the absence of major data releases to guide markets, Europe’s benchmark STOXX index showed a minimal decline of 0.04%, with U.S. futures poised for a similar trend. The dollar, however, weakened against major currencies, reaching its lowest level since September. Investors seemed to solidify their belief that U.S. interest rates have peaked, speculating that the Federal Reserve might initiate rate cuts in the coming year.
Earlier in the day, Asian stock markets were more dynamic, especially in Japan, where shares reached highs not seen since 1990. This surge was attributed to strong earnings and offshore demand, contributing to a three-week winning streak. Japan’s Nikkei encountered profit-taking but still maintained an 8.2% increase for the month, while the Topix followed closely behind.
MSCI’s broadest index of Asia-Pacific shares outside Japan recorded a 0.8% gain, building on last week’s 2.8% increase to reach a two-month high. Despite reports suggesting a tentative agreement between Israel, the United States, and Hamas to release hostages in Gaza, the confirmation was still pending.
As the U.S. approaches Thanksgiving, Black Friday sales are expected to provide insights into the consumer-driven economy. The upcoming holiday has led to thin market activity. While U.S. economic data releases are limited this week, the minutes of the Federal Reserve’s last meeting could offer some perspective on policymakers’ decisions to keep rates steady.
Also Read: Navigating Black Friday 2023: Retailers Battle for Shoppers in a Dynamic Landscape
The S&P has witnessed a nearly 18% gain for the year, staying less than 2% away from its July peak. However, analysts from Goldman Sachs highlight the dominance of mega-cap tech stocks, referred to as the “Magnificent 7,” which have seen a 73% return compared to a mere 6% for the remaining 493 firms. The analysts anticipate continued outperformance from these tech giants due to their superior expected sales growth, margins, reinvestment ratios, and balance sheet strength.
Tech major Nvidia is set to report quarterly results, attracting attention to the demand for its AI-related products. Market sentiment has largely priced out the possibility of further U.S. rate hikes, with a 30% chance of easing starting in March. Futures imply approximately 100 basis points of cuts for 2024. This outlook has spurred a rally in bonds, with 10-year Treasury yields at 4.45%, down 19 basis points from last week. In Europe, sovereign names such as Italy and Portugal experienced reduced risk premia after Moody’s upgraded its outlook for both countries.
Upcoming surveys of European manufacturing will be closely watched for signs of weakness, potentially influencing expectations of early rate cuts by the European Central Bank. Commodity markets saw a rebound in oil prices from four-month lows on Friday, driven by speculation that OPEC+ might extend or increase production cuts at its meeting on November 26.
Brent crude rose to $81.08 a barrel, while U.S. crude reached $76.2 per barrel. Gold, however, dipped slightly to $1,978 an ounce after a 2.2% increase last week.
Our Reader’s Queries
Does market go down on Thanksgiving?
As Thanksgiving approaches, most of the U.S. will be shutting down to celebrate the holiday. This usually results in low trading volume in the markets. However, when trading resumes, certain stocks tend to experience a surge in activity and climb rapidly. CNBC Pro’s screening has identified these stocks that seem to awaken from their post-feast slumber.
Does the stock market usually go up on Black Friday?
According to Dow Jones Market Data, historical trends indicate that the day after Thanksgiving, also known as Black Friday, typically does not result in significant market fluctuations. Since 1990, the S&P 500 SPX has only increased 55% of the time on this day, with an average gain of 0.07%.
Do markets rally after Thanksgiving?
Historical data from Dow Jones Market Data reveals that the S&P 500 has shown a noteworthy average gain of 0.54% during Thanksgiving week over the past 50 years. Impressively, 68% of these instances have resulted in positive returns. This is a significant increase compared to the average weekly gain of 0.16% observed throughout the year. These findings highlight the potential for investors to capitalize on the market’s seasonal trends during this holiday week.
What happens to the stock market a day after Thanksgiving?
The day prior to Thanksgiving is a complete trading day, whereas the Friday following (known as Black Friday) is a half-day with the stock market closing at 1:00 PM local ET time. This day holds significant importance for the retail industry, hence the name Black Friday.