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Thanksgiving Effect |
WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
Stock investors are not exempt from these feelings surrounding Thanksgiving day. After all, we have to remember that the stock market is not a living breathing entity unto itself. Rather, the stock market is a place where people—investors—gather to exchange stocks. It is the people who are important, and people are emotional creatures. Typically, people who are happy are more optimistic about the future, and this leads stock investors to be more optimistic about the future of the stocks they are interested in—which usually leads to price increases.
Moreover, Traders watch the retail numbers from Black Friday closely as it is a signal of consumer confidence in the economy. Consumers who are worried about the economy tend to spend less, while consumer who are confident in the economy tend to spend more. Positive projections for Black Friday signal a strong economy and rising stock prices. Negative projections for Black Friday signal a weak economy and slumping or stagnating stock prices.
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