Saturday, January 22

Sorry, Wall Street – Moneyweb

Thanks to who created an obscure part of the New York Stock Exchange bureaucracy, officially known as Rule 7.2, the US stock markets will not commemorate the start of 2022 with a holiday.

The rule stipulates that when a holiday falls on a Saturday, the market will close the Friday before, unless, that is, “unusual trading conditions exist, such as the end of a monthly or annual accounting period.” Since December 31 marks the end of the month, quarter, and year, that means a full session on New Years Eve and no days off the following Monday.

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While the exchange posted its vacation schedule a long time ago, complete with a footnote “- *” under the New Years Day 2022 column, some market participants are only now realizing that they are getting stiff. during the holidays. Adding salt to the wounds, bond traders can start their New Year’s Eve parties a little earlier: Sifma is calling for a market close at 2pm that day.

“People are going to lose their minds, honestly,” Kim Forrest, founder and chief investment officer of Bokeh Capital Partners, said by phone. “I look at that Monday and say, what the hell? Are you kidding me?”

There could be more at stake than just bitter grapes. Scott Bauer, CEO of Prosper Trading Academy, has a family ski vacation planned for the end of the year and said he will adjust his properties ahead of time just in case.

“What I will certainly do is position myself accordingly so that going into that long weekend, whatever position doesn’t expire on December 31st, whatever I may have after that, I’ll make sure I don’t have any expiration options. . or futures positions that first week of January, ”he said. “I will be in tune with the market, but I will absolutely not put new positions.”

It is not the first time that Wall Street has been deprived of a day off for vacations. Rule 7.2 also reared its ugly head 11 years ago when New Years Day fell on a Saturday in 2011. And there is actually good news on this year’s holiday calendar: a new day off was added for the 16th Day of the Year. National Independence on Monday, June 20. .

Not to mention, many traders these days can get away with avoiding the office, as the pandemic forced them to set up robust work-from-home setups. Volumes remained high in the days leading up to Thanksgiving last year as more merchants, trapped at home due to the pandemic, remained connected for customers. Paul Nolte, a portfolio manager at Kingsview Investment Management, plans to fly from Chicago to Florida at the end of the year and bring his “office,” that is, his laptop. “I still plan to party,” he said. “I’ll have to start a little later.”

Still, it goes without saying that not everyone is excited about a missed day off, especially since it is a federal holiday. A representative for the NYSE declined to comment.

“Lots of Grinches,” said Steve Chiavarone, portfolio manager and head of multi-asset solutions at Federated Hermes, as he looked at the calendar. Vacation or not, he added, many fund managers try not to be overly active at the end of the year.

“In general, you see a drop in liquidity in the last week of the year, actually starting around Christmas,” he said.

It is not just market liquidity that will decline this year.

“Maybe I wait a bit later in the day to start drinking champagne,” Chiavarone said. “I really don’t need to be drinking before 4pm.”

© 2021 Bloomberg

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