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It may be a slow day in the US with a shortened session, but it’s business as usual for the rest of the world. It was a busy day for data in Japan, and most of it was weaker than expected. Industrial Production, Retail Sales, and Housing Starts all missed expectations. At the same time, CPI surprised to the upside with the Core reading rising at a 2.2% y/y pace versus expectations for an increase of just 2.0%. Even with the weaker data, the yen rallied as the higher-than-expected CPI print increased the odds of a rate hike at the December meeting. The Nikkei fell 0.4% during the session, but Chinese stocks finished the day and the week in positive territory.

In Europe, the STOXX 600 is marginally higher after a positive session on Thursday. While inflation data in Japan came in hotter than expected, Eurozone CPI was up 2.3% y/y which was right in line with expectations while Core CPI was slightly weaker (2.7% vs 2.8%).

US futures are higher across the board with modest gains, and there’s no data on the calendar to speak of. Treasury yields are slightly lower, and Bitcoin is looking to make another run at $100K after failing to rally through that level late last week.

The day after Thanksgiving is considered a day when stocks usually trade higher, and since 1945, the S&P 500’s average performance on the day has been a gain of 0.23% with positive returns two-thirds of the time. Looking at a long-term chart of the S&P 500’s performance on this day, though, shows that in “the old days”, it used to be a much better day.  In the 40 years from 1945 through 1953, the S&P 500’s average daily change on the Friday after Thanksgiving was a gain of 0.44% with positive returns 80% of the time, and in the 29 years from 1956 to 1984, it was down just twice! If the market was going to make you come to work the day after Thanksgiving, at least it usually gave you an up day!

Since 1985, performance the day after Thanksgiving has been more of a turkey. In the last 39 years, the S&P 500’s average performance on the Friday after Thanksgiving has been a gain of just 0.02% with positive returns just 54% of the time. Not only has today become much more of a coin flip over the last 40 years, but it has also included the worst after-Thanksgiving performances. In 2021, the S&P 500 plunged 2.27% thanks to the Omicron ‘scare’. Then in 2009, the S&P 500 dropped 1.72% on concerns about debt problems in Dubai while in 1987, it fell 1.5% as investors were still worried about the crash a month earlier.

As bad as those days all were, they weren’t a bad omen for the rest of the year. In 1987, the S&P 500 finished the year 2.8% higher, while in 2009, it rallied 2.2% into year-end. Finally, in 2021 it finished 3.7% higher.  Maybe C.S. Lewis was right, after bad Thanksgiving Fridays, “There are far, far better things ahead”!

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