Written by Brenda Nakalema

Wondering if the stock market is open on New Year’s Eve and Monday? Short answer, Yes.

The stock market rarely sleeps, and those that are active participants won’t be disappointed to know that there will be …

The stock market rarely sleeps, and those that are active participants won’t be disappointed to know that there will be no year-end holiday.

U.S exchanges will remain open on New Year’s eve and Monday next week. Traders usually have to observe New Year’s day- but this time, the first day of the year falls on a Saturday.

In justification for the change in rules this year, the New York Stock Exchange cites rule 7.2. The rule essentially stipulates that the exchange remain open on the Friday before a Saturday holiday in cases such as the end of the year or the end of a quarter.

Here’s an excerpt of the rule;

“When a holiday observed by the Exchange falls on a Saturday, the exchange will not be open for business on the preceding Friday, and when any holiday observed by the Exchange falls on a Sunday, the Exchange will not be open for business on the succeeding Monday unless unusual business conditions exist, such as the ending of a monthly or yearly accounting period.”

Following the rule, the NYSE will keep its doors open on Monday since New Year’s doesn’t fall on Sunday. When the New Year’s Day falls on a Sunday, as will be the case in 2023, the following Monday will be a holiday.

The Federal Reserve will also not observe the holiday on Monday this year. However, Bond traders will be permitted to close off at 2pm on Friday. Despite this, some other exchanges are handling the situation differently; Toronto and London exchanges will be closed on Monday, Jan 3.

Stock Market Year Review

Despite the great year the stock market has had, Americans don’t seem to be in a celebratory mood of any kind. The University Of Michigan Index Of Consumer Sentiment dropped 13% to 70.6 in 2021- the lowest end of year reading since 2008. This might puzzle most because, unlike that year where the S&P 500 index fell y 38%, the index is up by over 27%. It’s the largest stock market gain in a year when consumer sentiment dropped by double digits in the last 25 years.

The ostensible reason for the bad mood might be the fact that Covid-19 was expected to have been gone by this time. But because of a potent combination of vaccine reluctance, ever-mutating viruses, and other factors have left the world still in the grip of the virus. “The outlook for Omicron remains the same, as cases continue to break records globally, but the lack of sharp increase in hospitalizations is allowing stocks to rally into the year-end,” writes Tom Essaye.

The other concern weighing heavily on the hearts of Americans is the surging inflation, especially after the Federal Reserve announced that rising prices would be “transitory”, and yet as the year ends, the consumer price index remains on its upward trajectory- the fastest since 1982.

The latest University of Michigan report stated that a fourth of its respondents admitted to experiencing a decline in their living standards due to inflation. “The hope of a brief and fleeting spurt in prices has been dashed,” said Stephen Stanley, chief economist at Amherst Pierpont securities.

Since 1997, the sentiment has steadily declined for 12 years straight, with the S&P 500 hitting higher levels for seven of them. However, during those years, the decline in confidence was meagre in comparison to the levels it currently stands at. The only other year comparable to 2020 when confidence faced a double-digit decline was 2007, when a recession was in full swing, but even then, the S&P 500 closed at a 3% gain.

These intriguing results might be an indication of a growing divide between what respondents say and do. Retail sales increased by 18.2% in November, year over year. Even those that cited inflation as a cause for the drop in their consumer sentiment might be missing the mark as indicated by Google searches for words like “discount,” “cheap,” and “coupon” are declining, not rising.

Amidst all this contradiction are investors who also seem unexcited about the stock market despite the three consecutive years of double-digit gains. According to Jason Goepfert, the latest sentiment survey from the American Association of Individual Investors shows that the bulls percentage stayed below 45% for a fifth straight week despite the S&P 500 trading above its rising 50-day moving average.

Because consumers’ negative views don’t necessarily match their actions, investors continue to buy stocks- and that should at least lighten the market mood. And if this doesn’t have the sad, then the fact that the Fed is cutting back its bond purchases, and the federal- fund futures market is pricing in a greater than 50% chance of a rate hike at the March meeting of the Federal Open Market Committee will downright depress them. This might create some volatility in the market. Whichever way the wind blows, investors are likely to keep a close eye but might need better reasons to sleep soundly at night.