What to watch

Memorial Day week usually sunny for stocks

As Americans hit the beach, enjoy backyard barbecues and attend parades honoring the sacrifices of U.S. soldiers this coming Memorial Day weekend, they can also look forward to better-thannormal returns in the stock market in next week’s four-day trading period.

That’s right, since 1971, when Memorial Day was first recognized as a federal holiday, the large-company Standard & Poor’s 500 stock index has posted average gains of 0.54% and finished higher 60% of the time, according to data from Bespoke Investment Group.

And while 0.54% might not seem like a rally to brag about, “it is more than three times the 0.16% average gains for all weeks since 1971,” Bespoke stressed in a note to clients.

And don’t forget that these above-average returns after Memorial Day occur in only four trading days, not the normal five.

The gains in the shortened holiday week are even better when the market is up for the year heading into the long weekend. In those up years, the weekly gains in the four-day post-holiday week jump to 0.65%, and the market finishes up 63.3% of the time.

So enjoy those burgers and hot dogs and adult beverages.

If history is a guide, rising stock prices next week might take the sting out of those hefty cash outlays for the big weekend that marks the unofficial start to summer. The nearly 2% rally heading into the big weekend is an added bonus.