U.S. stocks are up in 2023 as they head into the typically favorable “home stretch” of the year, with equities tending to rise the week after Thanksgiving, Bespoke Investment Group found.
“There are just 24 trading days left in the year,” Bespoke said in an emailed note Monday. “November and December have historically been one of the stronger times of year for the market.”
The S&P 500, a gauge of U.S. large-cap stocks, has soared 18.7% so far this year based on midday trading levels on Monday, FactSet data show. That includes an 8.7% jump in November, with the index on track for its strongest monthly performance of 2023.
Although the S&P 500
SPX
was trading slightly lower around midday Monday, history shows this week has tended to finish with a small gain as the calendar transitions to the Christmas and New Year’s Day holiday season, according to Bespoke.
“For all years since 1945, the S&P 500’s median gain during the post-Thanksgiving week has been a modest gain of 0.19% with positive returns 55% of the time,” the firm said. When the index already was up at least 15% for the year, Bespoke found the median gain was 0.16%.
In more recent history, the S&P 500’s performance generally has been stronger in the week after Thanksgiving, as seen in the chart below.
“In the last 20 years,” Bespoke said, “the S&P 500’s median gain during the current trading week has been 0.44% with positive returns 70% of the time.”
The index’s historical performance during the first week after Thanksgiving compares with a 0.24% median gain for all weeks since 1945 with five trading days, according to Bespoke.
The S&P 500 is rebounding this year from a rough 2022, when it tumbled 19.4% as the Federal Reserve rapidly hiked interest rates to battle surging inflation. It was the S&P 500’s worst year since 2008, according to FactSet data.
The economic calendar is light to kick off this week, with Bespoke saying Monday’s sole report was fresh data on new-home sales.
“It’s hard to imagine a quieter start to the week of trading,” the firm said. On Monday morning, there was “very little in the way of corporate or economic news.”
The Census Bureau and Department of Housing and Urban Development jointly announced on Monday that new-home sales in the U.S. dropped 5.6% in October from revised figures for September, to a seasonally adjusted annual rate of 679,000. Last month’s sales fell below the level expected by economists polled by the Wall Street Journal.
Read: New-home sales drop in October to much lower level than expected
The U.S. stock market was trading mostly lower in midday trading Monday. The Dow Jones Industrial Average
DJIA
was down 0.2% while the S&P 500
SPX
slipped 0.1% and the Nasdaq Composite
COMP
edged up 0.2%, according to FactSet data, at last check.
Read More: Stocks are up in ‘home stretch’ of 2023. Here’s how equities historically