25 Stocks to Target During Memorial Day Week

The SPX's 9% gain heading into the holiday weekend bodes well for the rest of the year

Senior Quantitative Analyst
May 24, 2023 at 8:00 AM
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Markets are closed Monday, May 29 for Memorial Day, a day when Americans remember and honor those who have served in the military. Since 1971, it has been celebrated on the last Monday of May. This week, I’ll show you how the broader market performed in the past during the holiday week, while listing some of the best and worst individual stocks during the week.

Since 1971, the week of Memorial Day has been a good week for the market. The SPX Index (SPX) has averaged a return of 0.49%, which easily beats the index’s typical 0.17% weekly return. Recently, however, the holiday week has been bad for stocks. Since 2010, Memorial Day week has averaged a loss of 0.55%, with just 46% of the returns positive. A typical week since 2010 has averaged a return of 0.22% for the SPX, with 58% of the returns positive.

SPX Weekly Returns_5232023

A Day-by-Day Breakdown

The table below summarizes the SPX return by day for the week of Memorial Day. I also include the Friday before Memorial Day, which has tended to be bullish. Tuesday tends to be mixed, with an average return of 0.17% for the day, though barely 40% of the returns have been positive. Thursday tended to be a bullish day for the market with the SPX averaging a gain of 0.20%. The three days after Tuesday all have been positive about 60% of the time, a higher rate than other weeks of the year.

SPX 1971 Returns_5232023      

Here’s the daily breakdown for the SPX during Memorial Day week since 2010. Just like the table above, Thursday has been the best day of the week. Unlike the table above, every other day of the week has been bearish for stocks. Wednesday averaged a slightly positive return but less than half of the returns were positive. Friday has been especially bad, averaging a loss of 0.71% with only 38.5% of the returns positive.

SPX 2010 Returns_5232023

Good Omen for Rest of Year

So far in 2023, the SPX is up about 9% and that is good news for the rest of the year. The table below suggests the price action of the market heading into Memorial Day creates momentum for the rest of the year. From the table, years when the SPX was positive on Memorial Day, the rest of the year averaged a return of 6.55%, with 77% of the returns positive. If the index was down heading into the holiday, the rest of the year averaged a slight loss with less than half of the returns positive.

SPX Rest of Year Returns_5232023

Best and Worst Individual Stocks

As promised, below are the SPX stocks that have done the best and worst over the past ten years during Memorial Day week. Electronic Arts (EA) is the only stock that has been up every year during the week of Memorial Day. For whatever reason, technology hardware companies make up a large proportion of the bullish stocks.

Housing seems to be out of favor for investors during the week. Household Goods & Construction and then Construction and Materials make up seven of the 25 stocks on the bearish list.

Best SPX Stocks Week Memorial_5232023

Worst SPX Stocks Week Memorial_5232023

 

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