The stock and bond markets in the US remain closed on Mondays. This is due to the observance of the Martin Luther King Jr. Holiday. And at that time Wall Street witnessed a record-breaking run for equity shares.
There are many federal holidays that in a way affect the day-to-day business of several institutions in the United States. These days, the banks and the postal offices have days off. But, the stock market follows a different holiday routine. So, the question arises whether there is a chance of the stock market closure on martin Luther king day.
Well, on MLK day, the U.S. stock market remains closed and the investors can not make a trade on that day. MLK day falls on the third Monday of January every year and all the businesses need to operate either on the previous day or the day after.
A small history and the significance of the closure of the stock market on MLK day
This holiday is honored in the name of the civil rights leader Martin Luther King Jr. on the third Monday of each year who was born on January 15, 1929, and was killed on April 4, 1968, at a motel. The observation of a holiday has emerged as the latest trend and is seen to be religiously followed by the mass. President Ronald Reagan signed the holiday into law in the year 1983 and in 1986, the holiday came to be established officially.
Till then, some of the organizations remained open and observed a minute’s silence in the afternoon.
Operating norms of various markets worldwide
On this particular holiday this year, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite indexes have made records on an almost daily basis. The DJIA and S&P 500 records rose to 2.8% in the first three weeks in 2020. Nasdaq made records of more than 4%.
The SIFMA had suggested the markets remain closed including dollar denomination trading and the markets of the U.K. and Japan. Gradually in the year 1998, New York and Nasdaq decided to close for the federal holiday. The U.S. commodity market association has also declined to trade on this holiday. The energy and metal products shall operate trading electronically at 6 p.m.
Though the markets in the U.S. declared this day as a holiday officially, the Stoxx Europe 600 and the FTSE 100 in Europe, along with the Shanghai Composite in China operate a business in a very normal way on this day.
Similarly, the bond markets, though works in a similar style like the NYSE and NASDAQ, but still has a different work schedule. These markets remain closed on Mondays and any sort of operations shall be carried on to the next day.
Apart from the stock market closure on martin Luther king day, some more holidays are observed like New Year’s Day, Washington’s B-Day, Good Friday, Independence Day, Labor Day, Thanksgiving, Christmas Day, etc.
All the markets shut down at 5 p.m. on business days and at 1 p.m. on Christmas Eve and Black Friday.