Home About Archives RSS Feed

The Independent Investor: Good Friday and the Stock Market

By Bill Schmick
iBerkshires Columnist

This Friday the stock and bond markets will be closed to commemorate the crucifixion of Jesus Christ, or so the theory goes. But that is just one of the many myths involved in this holiday and its origins remain a mystery.

The fact that the New York Stock Exchange (NYSE) has a tradition of closing on Good Friday, one of nine holidays per year, has many traders and investors scratching their heads. After all, it is not a federal holiday and plenty of other businesses are open on that day. What makes Good Friday any more important than say, Columbus Day?

There is a story that during the 1890s there were three years in a row that the market suffered big drops on Good Friday. Superstitious traders took this to be a sign from God that "Thou shalt not trade on Good Friday." There is no evidence that is true. The Exchange was open for trading during Good Friday on three separate years (1898, 1906 and 1907). However, when the exchange did open for business in those years, the market was up two of those three Good Friday dates.

Another fable that many believe was that the market suffered through a Black Friday market crash in 1869. As a result, the Board of Governors of the Exchange swore never to open again on Good Friday. That seems a little hard to believe, since records indicate the exchange was closing on Good Friday as far back as 1864.

Art Cashin, the renowned trader at UBS, says there never was a stock market crash in 1869 but there was a crash in the gold markets back in September of that year. Easter week, however, is in April, not September, so go figure.

Although Good Friday is not a federal holiday, many states do recognize it as a state holiday with local governments, banks and other institutions closed this Friday. As a result, trading volumes are smaller, since fewer potential players are at work.  Businesses that normally stay open on Easter Sunday also tend to close on Good Friday so that their employees get a day off to compensate for working on Sunday.

Some think that the holiday was a nod to Jewish and Christian traders looking for a day off between Passover and Easter. Globally that makes some sense since already anemic trading volumes are even lower because Europe traditionally closes for Easter week. But as the original reason for this NYSE holiday, it does not square. Daily global trading is a relatively recent phenomenon on the stock exchanges.

There is some reason to believe that religion did play a role in the holiday. New York, a century ago, was the home of Irish immigrants. As such there was a preponderance of Irish Catholic officials in just about every walk of life in the city, including the NYSE. It is plausible that those officials could have lobbied for the closing of markets during this important Catholic holiday.  But no one can prove it.

So the origins of this stock exchange holiday remain mired in mystery. It is just one of the many quirky twists that amused and confuse Wall Street on slow holiday weeks. Whatever the reason, Friday is a day off for me, but never fear; I'll still be writing your market column as usual.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Barrett Enters His First State Budget Debate, Sets Eyes on RTAs
Pittsfield Airport to Have Runway Repaved; Solar Array Installed
Adams-Cheshire Nixes Shared Superintendent Idea
Four Freedoms Presents Day of Civic Empowerment
ArtWeek to Launch Across Massachusetts
Berkshires Beat: Sen. Hinds Reads Aloud to Young Children in Pittsfield
Biz Briefs: Nonprofit Center Names Award Finalists
SVHC Auxiliary Hosts Exhibit of School Children’s Artwork in the Corridor Gallery
BHS Expands Endocrinology Care With Addition of New Doctor
Baseball in the Berkshires Celebrates Anniversary at Mall on Saturday

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (255)
Independent Investor (348)
Archives:
April 2018 (5)
April 2017 (2)
March 2018 (6)
February 2018 (7)
January 2018 (7)
December 2017 (8)
November 2017 (5)
October 2017 (5)
September 2017 (5)
July 2017 (2)
June 2017 (8)
May 2017 (7)
Tags:
Election Japan Economy Taxes Wall Street Europe Commodities Stock Market Crisis Stocks Euro Retirement Europe Bailout Fiscal Cliff Jobs Housing Interest Rates Deficit Rally Congress Oil Banks Greece Metals Debt Federal Reserve Pullback Selloff Debt Ceiling Stimulus Markets Recession Currency Energy
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
@theMarket: Markets Are Going Higher
The Independent Investor: Does Cash Mean Currencies?
The Independent Investor: General Motors — Back to the Future
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Earnings Up; Stocks, Not So Much
The Independent Investor: Why the Tax Cuts Are Unpopular Among Americans
The Independent Investor: The Facebook Fallacy
@theMarket: The Trump Trade Bluff
The Independent Investor: Free Trade Vs. Fair Trade
@theMarket: Will April Be Better for the Markets?
The Independent Investor: Financial Planners Held to Higher Standard
@theMarket: Trump's Trade Wars Sink Markets
The Independent Investor: Medicare Premiums and Your Income
@themarket: Trump's Tariff Talk Trashes Global Markets