Indicator of the Week: 25 S&P Stocks for Your Easter Basket

The SPX's pre-Easter performance has often been indicative of its rest-of-year returns

Senior Quantitative Analyst
Mar 23, 2016 at 6:30 AM
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Markets are closed this Friday for Good Friday, as we celebrate Easter over the weekend. I figured this was a fitting time to see how stocks have performed around the holiday. Also, I found an interesting stat on what pre-Easter performance means for the rest of the year. Finally, I'll look at which stocks have historically performed well in the week following Easter.

Days Surrounding Easter: The table below looks at how the S&P 500 Index (SPX) has performed in the days around Easter over the past 50 years. Two days before the holiday (today), the return is very similar to a typical day for the market. However, the day before the Easter weekend has been pretty bullish over the past 50 years, averaging a gain of 0.36% and positive 68% of the time. Compare that to a typical day for the index, with a gain of 0.03% and positive 53% of the time.

The day after Easter, though, has tended to give back some of those pre-Easter gains. Over the past 50 years, the Monday after Easter has averaged a loss of 0.17% and has been positive only 40% of the time. Historically, it has been wise to avoid stock exposure over the weekend, if you can. Also notable is the lack of volatility around the holiday. The volatility of the returns of those three days summarized below are all below the typical daily volatility, as measured by their standard deviation.


Rest of the Year After Easter: I thought the data below was interesting. It suggests that the pre-Easter return in a year is a precursor for what to expect the rest of the year. When the SPX was positive through the Easter holiday, the rest of the year was positive 87% of the time, averaging a gain of 8.65%. When the S&P was negative through Easter, the rest of the year returned a loss, on average, of 1.41% -- and has been positive just 45% of the time.

I thought that was interesting, and so far this year, the S&P 500 has a razor-thin gain of about 0.3%. However, I'm skeptical that a few points lower would drastically change the outlook for the rest of the year. Still, I guess it can't hurt to have history on your side.


Stocks After Easter: Why would certain stocks tend to outperform or underperform in the week after Easter? I really can't think of a reason that makes sense, other than randomness, but I ran the numbers anyway. Looking at S&P 500 stocks over the past 10 years, the first table below shows the stocks that have done the best in the week after Easter. They have all been positive at least eight of 10 years and averaged a gain of 1.25% or better. The second table shows stocks that have performed the worst after Easter.




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