When stock markets and markets stay shut: 6 major holidays

Written by By Sam Parker, CNN “Those days are too busy,” we’ve heard many a mom, dad and grandparent moan about New Year’s Eve. But what about Thanksgiving? That’s when they can work. “All…

When stock markets and markets stay shut: 6 major holidays

Written by By Sam Parker, CNN

“Those days are too busy,” we’ve heard many a mom, dad and grandparent moan about New Year’s Eve. But what about Thanksgiving? That’s when they can work. “All aboard the Santa Claus Express.” Or December 25. Well, New Year’s Eve. But where’s the excitement in that?

But don’t worry, the holidays really do need to be counted.

While Wall Street and the Chicago Board Options Exchange will go quiet on Thanksgiving, for the following seven days we will not.

Not on 24 November, but 13 December when market trading will be closed for the Christmas Day holiday.

If you’ve still got a few days to go, you can expect to see the same on 18 December when the NYSE and NASDAQ will go dark.

Again, it’s a huge loss of data. But also sales and trading gains that would have otherwise come from last minute buying or selling.

All 2.7 billion citizens of the world can thank two major financial markets for the riches of December:

The opening and closing prices of the Dow Jones Industrial Average are calculated from the late trading of the Nasdaq. Credit: PAUL ELLIS/AFP/AFP/Getty Images

International markets: Trading stops at 7pm Eastern Time each day at stock exchanges around the world. Think New York, Frankfurt, Tokyo, Hong Kong, Stockholm and London, to name a few.

That means Christmas Eve and Christmas Day will feature a stock market closing for the entire rest of the world.

It’s a tradition of New York that has been in place since 1904 when the stock market in the Big Apple had two days off on the final day of the month. Since then, the Wall Street trading bloc has kept this tradition in place, not only for the 22 special trading days in the US, but also for every other Christmas.

That includes New Year’s Eve, the UK’s Boxing Day sales and the Chinese Lunar New Year.

Even what you’re thinking about Christmas is seen as a worldwide affair. Everyone wants to make a fortune on Santa’s sleigh.

The US Federal Reserve Bank announced in October that it had decided to end its term of open-ended bond purchases, nicknamed quantitative easing (QE).

The Fed had bought $4.5 trillion in bonds to stimulate the economy, bringing interest rates close to zero.

This policy had led to a surge in bond prices which in turn stimulated a spike in asset values, particularly shares and financial markets which was dubbed the asset price bubble.

However, the Federal Reserve has decided that it should now put an end to QE as it will cost $50 billion a month in bond buying, just a touch less than half of what it’s spend on them in the past.

These “annual cap rates” are also a sign that Fed policy is having a ripple effect which is setting markets up for what could be an aggressive rise in interest rates.

Gold

Gold has been falling this year from a peak in April to a three-year low in August. Credit: Daniel Leal-Olivas/AFP/AFP/Getty Images

While we all look forward to gold sitting on our mantelpiece every December, for investors gold’s own under-performing year means the precious metal is likely to be the holiday season’s gift to U.S. retail investors.

“There’s a big opportunity for retail investors to do well this year as many on Wall Street are still buying gold because they’re getting ready for a likely rise in interest rates in 2019,” Tim Reid, managing director of research firm Global Gold Associates, told CNBC.

“The impact of a trade war and slower growth in China have hit gold more than anyone expected. Gold is holding up better than expected. A rising rate environment is more bullish for gold.”

So, forget about Chanukah presents. If you want a good start to 2019, best put your list away and start shopping for a good investment instead.

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