Dec. 23, 2022 12:01 am ET
By
Emily Dattilo
Since 1950, the S&P 500 has averaged a 0.6% gain the week of Christmas.
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This holiday season hasn’t exactly been filled with cheer for investors: Companies have been battling inflation and market volatility—and a recession seems to be looming ahead.
On Thursday, the market slipped, with the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite closing down 1.05%, 1.45%, and 2.2%, respectively. So far this year, the Dow has dropped 9.1%, while the S&P 500 is down 20% percent and the Nasdaq is off 33% percent.
Here’s what you need to know about trading hours ahead of Christmas.
Is the Stock Market Open Today?
Investors who wish to make trades before Christmas Eve are in luck: The New York Stock Exchange and the Nasdaq Stock Market will be open on Friday. The U.S. bond market will close early at 2 p.m. Eastern, while over-the-counter markets will keep regular hours.
Overseas, the Tokyo Stock Exchange, the Shanghai Stock Exchange, the London Stock Exchange, the Frankfurt Stock Exchange, the Paris Stock Exchange, and the Hong Kong Exchange will be open normal hours.
What Is a “Santa Claus Rally”?
The term refers to when stocks get a lift the last five trading days of the year—and the first two trading days of the new year. Friday could mark the start of one such boon for the market.
“As we near the end of December, investors are still waiting on that Santa Claus Rally, with stocks coming off back-to-back down weeks for the first time since September. Data showing inflation cooling may have given the market a short-lived boost, but the Fed standing firm with Powell driving home the point that rates could remain elevated for quite a while likely grounded some investors,” wrote Chris Larkin, managing director at E*TRADE from Morgan Stanley, on Monday.
When looking at the last five trading sessions of a calendar year—and the first two of a new year—since 1950, the Dow has averaged a gain of 1.38%, trading higher 79% of the time, according to Dow Jones Market Data.
If the Dow experiences a Santa Claus Rally this year, it would mark the seventh one in a row for the index.
Is the Stock Market Closed for Christmas 2022?
Since Christmas Day falls on Sunday this year—when U.S. exchanges will already be closed—the New York Stock Exchange and the Nasdaq Stock Market will remain shut on Monday, Dec. 26 in observance of the federal holiday.
Banks will be closed on Monday in observance of Christmas, which the Federal Reserve considers a bank holiday. The U.S. bond market and OTC markets will be shut, too.
What About International Markets?
Investors interested in foreign markets should prepare for a few changes. Stock exchanges in Tokyo and Shanghai will be open on Monday and keep regular hours. However, Paris and Frankfurt exchanges will be shut and reopen Tuesday.
The Hong Kong and London stock exchanges will be closed both Monday and Tuesday, before reopening on Wednesday.
How Have Stocks Performed Around Christmas?
Since 1950, the S&P 500 has averaged a 0.6% gain the week of Christmas, according to Dow Jones Market Data. Within that span, the index gained 67% of the time.
During the week of Christmas in 2020, the S&P 500 dipped 0.2%. Last year, the index rose 2.3%.
How Are Retail Stocks Poised This Christmas and Beyond?
November retail sales dropped more than anticipated, falling 0.6% to $689.4 billion, according to the U.S. Census Bureau. Economists had forecast a 0.2% decline. Retail stocks took a hit that month–and they’ve performed similarly in December.
The SPDR S&P Retail exchange-traded fund (ticker: XRT), which measures retail stock performance, has dropped roughly 12% so far this month. So far this year, the ETF is down about 34%, putting it on pace for its worst year since 2008, according to Dow Jones Market Data.
While the possibility of a recession is on the horizon, one analyst sees opportunities in specific types of retail stocks.
“We continue to be bullish on retailers in growing categories, like beauty (e.g. ULTA) or with an angle that positions them better than last year,” wrote Raymond James analyst Olivia Tong on Thursday. “E.g., [ BBWI ] has their new CEO now in place and their vertical integration of manufacturing should help them better navigate supply chain challenges.”
Write to Emily Dattilo at emily.dattilo@dowjones.com |
