The Easter (Bunny) Effect
By Dian Vujovich
It’s clearly the last holiday weekend of the season and the roads and restaurants are jammed beyond belief. Even the valets at Publix are going crazy with shoppers loading up on Passover and Easter goodies. The only quiet money place is Wall Street. Oh, and the European markets.
Let’s begin with Europe.
Unlike in the U.S., markets in Europe get to enjoy a four-day holiday. Of Europe’s 12 stock markets, from Germany’ DAX 30 to Sweden’s OMX 30, all were open on Maundy Thursday except those in Denmark and Norway. All dozen, however, were closed on Good Friday and will also be closed on Easter Monday so don’t look for any action on them until Tuesday.
If you’ve been hunting for some clues revealing how stocks will perform after the bunny comes to town, good luck. Much like tying to find an answer to that age-old question, “Which is the best way to eat a chocolate Easter bunny, head or legs first?” there’s no one right definitive answer.
Some research has shown that there’s a 44 percent chance of large-company stocks going up for the remainder of the year if those stocks were down a few percentage points before the Easter holiday
Other data reveals if the S &P 500 has thus far posted positive results, the rest of the year will be hopping good. In an online article, Rocky White, an analyst at Schaeffer’s Investment Research, said if that were the case, 90 percent of the time gains going forward would go up an average of about 10 percent.
If there’s any truth to that, here’s some data: According to InvestorGuide.com, U.S. stock markets ended the month of March on the downside. The Dow Jones Industrial Average was down at the end of that month and its first quarter results were also down. The S&P 500 Index was down for the month of March but its first quarter results were up a tad. Hippity hop. Hippitty hop.
But tiny index ups and downs can easily be forgotten when you look at how some individual stocks have performed so far this year.
Barchart.com ranks stocks by their year-to-date performance. At that site, I counted more than 24 stocks with per share prices up from 100 to 400 percent thus far this year. Of the first 100 stocks listed all were up at least 54 percent. Of their list of 250 stocks, the poorest performer was up over 34 percent, based on April 2, closing prices.
My neighbors have a pet bunny named BunBun. He, (or is it a she?), is cute as a button and soft as melted Lindt Lindor truffles are once they make it inside your mouth. Since I’ve never really known the Easter bunny to be particularly greedy or a seer of things to come on Wall Street like their animal buddies the bears and bulls are called upon to do, I have seen how quickly these little cuddly creatures can move—and change direction.
That noted, if I were holding a basket filled with super-high performing goodies, bunny market logic might find it smart to sell the basket of green and hippity hop on down to the bank before those loveable little creatures change direction.
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