Why Monday May Be the New Friday on Wall Street

The SPX is averaging a 0.29% gain on the first day of the week in 2023

Senior Quantitative Analyst
Nov 8, 2023 at 8:00 AM
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The S&P 500 Index (SPX) has averaged a 0.29% return on Mondays in 2023. That is the best ever year for Mondays when looking at data since 1950. This is interesting given that Mondays are, historically, the worst day of the week for stocks, and the only day since 1950 to average a loss. This week I’m examining whether this is just an interesting anomaly or if it suggests a bullish or bearish case for stocks going forward.

SPX Best Years

Is Buying Mondays Smart Money?

The chart below shows the average three-month return for each day of the week from the beginning of the year. Monday sticks out because it’s the only day trending higher over the past few months, as well as the only day with a positive three-month return. Next, let’s look at how the SPX performed after times that Monday was the lone day of the week. According to the chart, it averaged a positive return over the past three months.

3 Month Average Return

The table below shows dates where Monday was the only positive day of the week on average over the prior three months. I only listed the date if it was the first signal over the prior six months. The most recent signal was at the end of September. The S&P 500 was down 3.6% over the prior three months on the date of the signal. 

Overall, the SPX tended to perform well after these 13 prior signals. The index averaged a return of 3.1% over the next three months, with 77% of the returns positive. That beats the typical average of 2.2% and 66% positive. The SPX outperforms a year later as well after these signals.

The bad news is that in the four weeks after the recent signal, the S&P 500 was down about 4%. There were four prior signals in which the index was down in the first month after a signal. In three of four instances, stocks fell further over the next 11 months.

SPX After Monday

 

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