Blame it on an obscure rule. For the first time in a decade, there will be no market close on New Year’s Day.
The U.S. markets will be closed on Christmas Eve, this Friday, because the Christmas holiday falls on a Saturday, but the stock markets will be open on December 31, which is New Years Eve, and the operators of the New Year’s Stock Exchange. York are not. designating January 3, the first Monday in 2022, as observed on New Year’s Eve.
The last time this kind of calendar event happened was on New Years Eve in 2010.
How rare is this calendar event? Assuming it had been applied since 1928, it would have occurred 13 times from 1928.
The lack of a New Year’s Day respite for stock traders is a result of NYSE Rule 7.2, which states that the exchange will be closed on the following Friday or Monday if the holiday falls on a weekend, unless “unusual business conditions exist, such as the end of a monthly or annual financial year.
In this case, the last day of December is a trio of accounting dates, including month, quarter, and year end dates, and comes as the markets have experienced a period of volatility in recent days.
On Monday, the Dow Jones Industrial Average DJIA,
sank 433 points, while the S&P 500 SPX,
and the Nasdaq Composite COMP,
both saw sharp declines and their third straight decline amid unease and concerns over omicron about global economic expansion in the coming year.
Read: Monday was a lousy month for the stock market heading into Christmas. Here’s what the story says about the comebacks the following Tuesday.
By Tuesday afternoon, however, the markets had compensated for these losses, then some and the yield of the 10-year T-Bills TMUBMUSD10Y,
was hanging nearly 1.50% after finishing at 3:00 p.m. EST at 1.418%, according to Dow Jones Market Data.
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It should be noted, however, that the US Securities Industry and Financial Markets Association, a trading group, recommends a 2 p.m. ET close for trading in Treasuries on December 31.
The calendar of public holidays for the markets should not change the mood on Wall Street, however. “I don’t see this in a meaningful way,” Baird market strategist Michael Antonelli told MarketWatch.
“The last sessions of the year have traditionally been very quiet, and the fact that we don’t have a specific New Year’s holiday is unlikely to change that,” he said.
For Christmas, the bond market will close early on December 23 and will remain closed on Friday December 24 for Christmas Eve.
Read: Cathie Wood says stocks have corrected in “deep value territory” and will not let benchmarks “hold our strategies hostage”
Meanwhile, the New York Stock Exchange and the Nasdaq will observe regular hours on Thursday, December 23, closing at 4 p.m. EST and remaining closed on Christmas Eve.
See: “Considerable” risk that the United States and much of Europe will need COVID lockdowns this winter, according to Credit Suisse
Ken Jimenez contributed to this report.