Thanksgiving 2018 holiday impacts on Stock market

If consumers spend a lot during thanksgiving and the following days (black Friday) and retail trading levels increase, this signals to investors as regards more investments leading to profits.

Thanksgiving 2018 holiday impacts on Stock market

Thanksgiving (day) is an annual national holiday, celebrated on different dates in some countries. It is observed in countries such as the United States of America, Canada, Caribbean islands, Saint Lucia, Liberia, Australia and some other countries. It is believed to have originated from traditional harvest festivals in ancient times.It is also believed to have religious and cultural roots. It is celebrated in Canada on second Mondays of October and the fourth Thursday of November in the US. It is assumed as a time to offer thanks and prayers for blessings of plentiful harvest and the past year.

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Families come together to enjoy large meals and feasts, which represents the impression of bountiful harvest, which are symbolic of the event with the meals comprising of turkey, potatoes, cranberry stuff, pumpkin pie and bread stuffing. The thanksgiving day is usually followed by the black Friday, a day given to the first day after the thanksgiving day.

Thanksgiving day 2018 on stock market

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However, every holiday, including the thanksgiving, have various impacts on the stock markets causing predictors and analysts to make predictions that affects investment. This is known as the Holiday effect. Investors review trading numbers to gauge the health of the retail industry. Pre-thanksgiving days are important in the stock market as the stock markets begin to see increased trading activities before the thanksgiving day. Thanksgiving is a very crucial day for a lot businesses especially the food industry. Many sellers look to benefit from this seasonal bumps.

Most retailers, who have anticipated holidays such as the thanksgiving day,  use the day as an avenue to entice consumers by offering discount and lower prices on seasonal items such as holiday decorations. Discounts are also offered on top selling items in a bid to lure consumers. Although, consumers tend to spend a lot during thanksgiving, stock market is not affected by the thanksgiving day alone. The days following also have impacts on the stock market. If consumers spend a lot during thanksgiving and the following days (black Friday) and retail trading levels increase, this signals to investors as regards more investments leading to profits. This is reflected on the stock market level.

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On the other hand, if the overall outlook of the economy of an area is taken into consideration, consumers may decide to save or spend. While increased consumer spending may gratify the stock market, saving may also hurt. According to Keynes economics theory which indicates the effects of spending in an economy over output and inflation, lowered retail trading level is a major index for a slowed economic growth. Holiday sales are expected have huge potential to increase and consumers should spend more.

The investors strategy include purchasing equities before thanksgiving with the short term traders looking to sell just after the holiday and long term looking to wait till the end of the year. Traders will also try to be on the safe side by selling off in order to prevent the unexpected. The effect of this action forces down stock prices.

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Harish is the editor at howto Finance. Here we publish high quality trending news topics on Business, Finance, Loans and Credit-Cards etc. Our editorial includes worldwide topics.

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