Thanksgiving trading: How the markets tend to perform

With Thanksgiving week kicking off, Yahoo Finance's Markets Reporter Jared Blikre analyzes historical trends that emerge during this holiday trading period. Blikre breaks down typical equity market performances over Thanksgiving week, examining the historical data points in key indexes like the S&P 500 (^GSPC), Nasdaq Composite (^IXIC), and Russell 2000 (^RUT).

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Video transcript

- Now, historically, what has this Thanksgiving holiday week looked like for markets? Well, joining us now with more is Yahoo Finance's Jared Blikre with that breakdown. So Jared, what can we expect?

JARED BLIKRE: Well, Rachelle, historically, years and decades ago, thanksgiving week was a hugely bullish time for equities. Now it's a little bit more mixed. So I have the S&P 500, historically what it tends to do on each day of this week, along with the NASDAQ composite and the Russell 2000, and the S&P 500, going back to the early '60s, the NASDAQ early '70s, and the Russell the late '80s. And as you can see, Monday is the weakest by win percentage there.

You can see less than 50% for all three of those indices. On Tuesday, things get a bit better. And then on Wednesday, that is when we have the highest win rate. And then for the entire week, you can see it is positive more than negative 50% of the time. Now, here's a different look. This is measuring the actual returns on Monday, Tuesday, Wednesday, Friday, and for the whole week. And I should also mention that Friday is an abbreviated session. Of course, Thursday the market is closed.

But here, we see for the S&P 500, on Monday, which is today, historically, this is a day of losses. And that's only the median that I'm talking about there, but the average is also negative as well. You can see things turn positive for the rest of the week. For the NASDAQ all four days, all four week days are positive, and then for the Russell 2000, Tuesdays tend to be negative, but you can see they actually have the highest gains on average or on median, that's approaching about 1%.

And then we can also dig into some of the sector action. This goes back to the year 1999, unless the sector has been created since then in a couple cases. But, energy, by far a way, that is the best. That's up 1 and 1/2 percent on a median, basis going back 30 years or so, or 20 years or so. Materials is the second best gainer, then we have infotech, consumer discretionary, communication services, although that's only a few years old. And then staples up about half a percent.

But you can see all of these have median returns that are positive, and so that's what we tend to get. Now, I'd close by saying we do have some outliers and some interesting things can happen. I remember 2009, in particular, there was a concern about Dubai and its debt deal getting done. Look like it wasn't. The market opened up strongly in negative territory on Friday morning, climbed back into the green by the close, so just be on alert that if we do get some negative price action this week, it might just be a little bit of a fake out, but we'll have to judge it from there, guys. Thanks.