Memorial Day Week: Stocks to Buy and Sell

SPX performance so far this year may be a good omen

Senior Quantitative Analyst
May 22, 2024 at 8:00 AM
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The unofficial start to summer is next week, with markets closed on Monday for Memorial Day. This week, I’ll show you how stocks performed in the past during the holiday week. I will also list stocks that have done well and not so well over the next week.

The table below summarizes weekly returns of the S&P 500 Index (SPX) since 1971, when Memorial Day officially became the last Monday in May, and since 2010. In the longer term, Memorial Day week has outperformed the average week for stocks. The index averages a 0.52% gain over the holiday week, compared to a 0.17% pop over a typical week.

However, this trend has reversed since 2010. Despite overall market strength, the SPX fell an average of 0.38% during Memorial Day week, with just half of returns positive. In contrast, the typical week since 2010 has averaged a 0.23% gain, with nearly 60% of weeks being positive.

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Let’s look at where things have been going wrong during the week of Memorial Day. The table below summarizes the SPX by day for the week of Memorial Day. I also include the Friday before, which has tended to be very bullish.

Every day during the week of Memorial Day since 2010 except Thursday, the SPX averaged a loss, with less than half of the returns positive. Friday has been the worst, averaging a drop of 0.55% over the past 14 years. Thursday has been the lone positive day, averaging a gain of 0.26% with 57% of the returns positive.

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Good Omens

So far in 2024, the SPX is up over 11%, which is good news for the rest of the year. The table below suggests price action heading into Memorial Day creates momentum for the rest of the year.

When the SPX was positive on Memorial Day, the rest of the year averaged a return of 6.74%, with 78% 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 those returns positive. 

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Best & Worst Stocks to Own

As promised, below are the SPX stocks that have performed the best and worst over the past ten years during Memorial Day week. Electronic Arts (EA) is a perfect 10 for 10 as far being positive during the holiday week. For whatever reason, technology hardware companies and real estate investment trusts are prominent on the bullish stocks list. 

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Finally, here’s the list of stocks that have underperformed during the week of Memorial Day. Banking stocks and brokerages are well represented in this table.

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