Best and Worst Stocks to Own Over Labor Day Week

Labor Day is next Monday, so markets will be closed to start off the week. As investors look ahead to the shortened trading week, the S&P 500's performance offers some valuable insights. Currently, the S&P 500 Index is up about 9.5% year-to-date, which has been a good omen for the rest of the year. Over the past 50 years, when stocks have been moderately higher, up less than 10%, the index has averaged a return of 3.44% with 71% of the returns positive. If the S&P 500 can get to 10% on the year by the end of the week, history shows a rest-of-year return average of 4.58% with 77% of the returns positive. Either way, it has been much better compared to when the index has been negative heading into Labor Day. In those 11 years, the index averaged a slight loss, with 64% of the returns positive. 

Next, I’m looking at Labor Day week specifically. You may want to wait a week before buying into those bullish rest-of-year returns mentioned above.

Labor Day Week

Here’s what I mean by waiting a week to buy stocks. Since 2000, the S&P 500 Index has averaged a loss of 0.43% during the four-day Labor Day week, with only 44% of the returns positive. Even over the past 50 years, the index has averaged a slight loss on the week with just a 50/50 chance of a positive return. The week of Labor Day tends to be a bearish week for stocks.

The table below breaks down the week of Labor Day over the past 20 years. Going by the average return, Wednesday has been the only good day of the week, averaging a gain of 0.24%. However, less than half of the returns were positive. Friday has been the only day positive more times than negative, but the losses tended to be bigger than the gains, leading to an average loss overall for the last day of the week. 

Individual Stocks

Below, I list the 25 best and worst S&P 500 stocks during Labor Day week over the past 10 years. The stocks are sorted first by percent positive and then by average return. Auto-part stores O’Reilly Automotive (ORLY) and AutoZone (AZO) are at the top of the best stocks list. Electricity companies are overrepresented on the best stocks lists. Mega-cap technology stocks Apple (AAPL) and Nvidia (NVDA) are two of the worst stocks historically for the week of Labor Day.