Avoid This Sector 4th of July Week

Plus, a list of historically outperforming stocks

Senior Quantitative Analyst
Jun 28, 2023 at 8:00 AM
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If you’re looking to put on some positions before the 4th of July, this article may inspire some ideas. The table below shows the holiday week has been bullish over the past 50 years. The average return during the week of July 4th for the S&P 500 Index (SPX) was 0.4%, more than double the typical weekly return. In the next section, I break down how stocks behaved when the 4th of July lands on a Tuesday. Finally, I list the best and worst stocks during the holiday week over the last 10 years, which shows one sector you may want to avoid.

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Week Return Depending on the Day Off

This year, the 4th of July lands on a Tuesday which has been the best-case scenario for the S&P 500 over the past 50 years. When markets were closed on Tuesday, July 4th, the index gained an average of 0.84% for the week. Also, the standard deviation of returns shows very low volatility around that average.

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The table below shows the individual July 4th weeks where Tuesday was the holiday. You can see how the stock market performed each day beginning with the Friday leading into the week (that would be this coming Friday). Monday has been a bullish day, gaining 0.4% on average with five of six days positive. This is especially bullish considering Monday has been the only weekday averaging a loss going back to 1973. Tuesday, of course, is the day off, then Wednesday has been a bad day for the market. The day after the holiday averaged a loss of 0.42%, with half of the returns negative. To follow, the last two days of these weeks have been bullish, especially Friday.

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Best & Worst Stocks During Week of July 4th

The table below shows the best performing S&P 500 stocks over the past 10 years during the July 4th week. Software companies have performed well during week. Some of the biggest tech stocks have been Netflix (NFLX) (the only stock to be positive every 4th of July week over the past 10 years), Amazon.com (AMZN), Alphabet (GOOGL), and Apple (AAPL).

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Finally, the table below is a list of the worst stocks during July 4th week over the past ten years. Oil stocks, which have performed poorly so far in 2023, dominate the list. If you expect oil to reverse at some point, you may want to wait a week before placing a bet.

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