Get Ready For Thanksgiving Week Market Doldrums

Everything except shopping slows down over the holidays in the United States, and that certainly as much true of Wall Street as anywhere else. That’s why it’s not too surprising to hear there’s hard data that back up the slowdown in the financial sector around Thanksgiving and Christmas.

A November 17th report from Credit Suisse Trading Strategy highlights that the holiday doldrums on Wall Street are the real deal, with average volumes barely half of their normals. As Ana Avramovic and the CS team explain, the Thanksgiving holiday is pretty much a one-week blip and then back to business as usual until the week of Christmas when things slow down to a crawl.

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Thanksgiving week is historically slow

Avramovic et al. point out that based on average Wall Street trading data over the past nine years:

  1. Trading volume on the Monday through Wednesday of Thanksgiving week is usually around  7% lower than the daily volumes over the previous two weeks.
  2. The volume on Friday’s half day is typically around half the volume of the Monday through Wednesday’s average.
  3. That said, most everybody is apparently ready to get back to work after the long holiday weekend, as post Thanksgiving week volumes are usually pretty close to pre Thanksgiving week volumes.

Thanksgiving Week Market Doldrums

December also likely to be a slow month

Taking a look at trading trends throughout the rest of the holiday season after Thanksgiving, December’s average daily volume has been 3% below the year’s average, and 5% lower than November’s average, when you examine data going back over the last 17 years.

Thanksgiving Week Market Doldrums

This year hasn’t quite followed the typical pattern, though.August is typically the slowest month of the year, but this August had the 2nd highest monthly ADV in four years (after Oct 2014). Meanwhile, April and May were exceptionally slow.

Avramovic and the CS team note that if you ” consider that December’s volume is 5% lower than November’s, then we might expect to see around 6.8 bn shares/day in December.”

Thanksgiving Week Market Doldrums