The Turkey Trade: How Does The Market Historically Perform Around Thanksgiving?

With the S&P 500 down 16% since January and the Nasdaq Composite down 29%, investors have little to be thankful for in 2022.

Thanksgiving is Thursday, and investors are likely to wonder how the market has historically performed around turkey day and the week after.

The major stock exchanges will remain closed on Thanksgiving day and open for a half day on Black Friday, closing at 1 p.m. eastern time.

If history serves as an example, the equity markets could see a rebound around Thanksgiving.

Related: $1,000 Invested In SPY Just Before Thanksgiving Will Fetch This Much By Year-End If Returns Match 10-Year Average

Thanksgiving Week: The S&P 500 has historically had positive performance within the week of Thanksgiving, and especially during the Wednesday and Friday surrounding the holiday, according to data released by Dow Jones Market Research.

Since 1950, the S&P 500 has been up 83% of the time during the Wednesday-Friday period, in 60 out of 72 markets. Looking at the entire Thanksgiving week from Monday to Friday, history shows a little less success, but still, the index has been up 49 times out of a total of 72, or 68% of the time. 

The average return during Thanksgiving week has been 0.54% for the last 50 years against an average weekly return of 0.16% for all other weeks in that 50-year period, according to data from Schaeffer’s Investment Research.

The best returns are usually seen on the last active days of the week (Wednesdays and Fridays), which on average tend to surpass performance of Mondays and Tuesdays.

Still, historical performance is no guarantee. Each market offers its own complexities and investors should look at all variables when analyzing their decisions.

The Week After Thanksgiving: The last two decades show that in the week after Thanksgiving, the S&P 500 had a tendency to gain value more times than it lost it. 

The index dropped in value in 20% of all weeks following Thanksgiving in the last 20 years. 

Looking at the week after Thanksgiving between 2002 and 2021, we can see the index increased in price in 11 of those years, or 55% of the time; had no change in five (25%); and dropped in price in four (20%).

• 2021: opened at 464, closed at 446, lost 3.88%
• 2020: opened at 362, closed at 369, won 1.93%
• 2019: opened at 314, closed at 314, no change.
• 2018: opened at 265, closed at  275, won 3.77%
• 2017: opened at 260, closed at 264, won 1.54%
• 2016: opened at 221, closed at 219, lost 0.9%
• 2015: opened at 209, closed at 209, no change.
• 2014: opened at 206, closed at 208, won 0.97%
• 2013: opened at 181, closed at 180, lost 0.55%
• 2012: opened at 140, closed at 142, won 1.43%
• 2011: opened at 119, closed at 124, won 4.2%
• 2010: opened at 118, closed at 122, won 3.39%
• 2009: opened at 109, closed at 111, won 1.83%
• 2008: opened at 87, closed at 87, no change.
• 2007: opened at 144, closed at 148, won 2.78%
• 2006: opened at 140, closed at 140, no change. 
• 2005: opened at 127, closed at 126, won 0.79%
• 2004: opened at 118, closed at 119, won 0.85%
• 2003 opened at 106, closed at 106, no change.
• 2002 opened at 95, closed at 92, lost 3.16%.

Photo by Spencer Davis on Unsplash, edited by Benzinga.