S&P 500 Could Be in for a Disappointing Holiday Week

Keep these best and worst stocks on your radar

Senior Quantitative Analyst
Feb 14, 2024 at 8:00 AM
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The market will be closed on Monday, Feb. 19 in observance of Presidents' Day. While this four-day work week is nice, stock returns are less than ideal. Even last year, which brought a more than 20% win for the S&P 500 (SPX) overall, that week marked a 2.7% decline.

Historically, the week of Presidents' Day has been a tough one for stocks, with some showing resiliency amidst the poor overall performance, while others have underperformed more than average.

Lackluster Price Action Ahead?

Presidents' Day officially became the third Monday of February in 1971. Since then, the week has averaged a loss of 0.09%, with more negative returns than positive ones. The week has averaged a bigger loss of 0.34% since 2000, with exactly half of those returns positive. Plus, the SPX has been negative three of the last four years during that week.

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The table below breaks down SPX returns for each day of the holiday week. Tuesday averaged a loss of 0.3%, despite over half of those returns being positive. Friday has been notably bullish, averaging a pop of 0.22%, with 58% of these returns positive.

That’s different from all the weeks since 2000, in which Friday has barely been above breakeven. Meanwhile, Tuesday and Wednesday have usually been bad for stocks, with the SPX averaging a loss, and not even 40% of the returns positive for either day. With that in mind, if you’re looking to get into the market, it might be better to wait until late Thursday.

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Best & Worst

Historical data suggests the upcoming week tends to pose challenges for the SPX. The table below lists stocks that have outperformed during President’s Day week, though it's worth noting overall market performance is still poor.

Electricity stocks look overrepresented, with Pinnacle West Capital (PNW), Edison International (EIX), Xcel Energy (XEL), and Public Service Enterprise Group (PEG) coming from that sector. Nvidia (NVDA) is an interesting one, because it has been a juggernaut all year, and now is a bullish time for that stock.

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Finally, here are the worst performing SPX stocks during President’s Day week. Retail giant Walmart (WMT) tops the list, but notice a few banking major bank names as well, including Wells Fargo (WFC), Invesco (IVZ), State Street (STT), and Bank of America (BAC).

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