Can We Update Our Bank Holiday Rules

Another ridiculous law of a bygone era. A bank should be able to be closed for more than 72 hours so we have more 4 day weekends and no show up to work the day after Thanksgiving for a pointless half day.

Investors have a quiet week for the last trading week of the year. On the economic front, we have a quiet week with only Consumer Confidence and Chicago PMI.

Christmas:  Most markets around the world are closed on Monday for Christmas. Some of these markets are also closed Tuesday Boxing Day. (Except of course for the US since US banks can’t be closed more than 72 hours. This was put in during the Depression so people could get their money in case the bank was going under. Another rule which hasn’t kept up with the times). Somewhere in Europe last Friday, Homer Simpson was saying, “WooHoo, 4 day weekend!”

Low Volume Week: With lots of investors on vacation for the week, and minimal economic news being released, we can expect to see low volume across the board. Unless we have some unexpected geo political event expect a small Santa Claus rally potentially pushing stocks higher. Additionally, individual stocks could potentially see outsized moves if they have a lack of liquidity.

Profit taking: With the Dow, S&P and Nasdaq having year to date returns of approx. 25%, 20%, and 29% respectively, we will likely see some investors lock in profits for the year. If any stocks are down for the year (there is a handful) we could selling from them as investors try to offset their out sized gains for tax purposes. So any day this week, we could see individual stocks see out sized moves from a potential lack of liquidity.

Earnings: If any company does indeed schedule earnings or announce this week, they are most likely trying to hide a poor performance. So investors will be watching any company that has earnings as they try to hide a poor performance and have as few participants as possible trading. After the potential sell off from the low liquidity, this would be a great time to buy on the individual stocks price dip.

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