The U.S. and Canadian markets will be closed for Good Friday. By the way, Happy Easter...since I won't be there to tell you guys then.
So while the currency market is still "technically" open even though the U.S. and Canadian stock markets are closed, ...don't expect any large moves in the currency markets today. It could be in somewhat of a coma until after the holiday.
By the way, here are several theories below as to why the markets close on this day.
The New York Stock Exchange is
closed today, as it has been every Good Friday for nearly a
century and a half except for in 1898, 1906 and 1907.
That last one was in the same year as the infamous Panic of
1907, when the value of U.S. stocks plunged by more than a
third. Hence, a legend that persists 101 years later: Traders
get to stay home the Friday before Easter not just because it's
a Christian holy day but because of its association with one of
history's great bear markets.
Brooks P. Nelson, a second-generation professional
investor, remembers his father telling him the story every year:
``He used to say, `It's closed on Good Friday because of the
panic of aught-seven,''' Nelson, 53, said in a telephone
interview. Rumor had it that in 1907, ``the good Irish-Catholic
traders said, `We told you not to open on Good Friday.'''
Supposedly, the tale went, the market behaved so badly that
the exchange vowed never to allow trading on Good Friday again.
Circumstantial evidence aside, market historians and the NYSE
itself say the story is without foundation.
``I have no evidence in the archives that I've seen or the
notes of the details that would prove that theory,'' said
Robert F. Bruner, co-author of ``The Panic of 1907,'' published
last year, and dean of the University of Virginia's Darden
Graduate School of Business Administration. ``The panic itself
occurred in October 1907, although in March of 1907, there was a
significant break in the market.''
A Good Good Friday
Jeffrey A. Hirsch, editor of ``Stock Trader's Almanac,''
said that downturn started March 13, when the Dow Jones
Industrial Average tumbled 3.9 percent, and continued the next
day, when it lost 8.3 percent. Good Friday in 1907 fell on March
29, when he said the Dow climbed 2.5 percent.
The bear market began after the market peaked in September
1906. By November 1907, the value of all listed U.S. shares had
plunged 37 percent, and at least 25 banks and 17 trust companies
collapsed.
Among them were New York's Knickerbocker Trust, where
rumors of financial problems triggered a run on banks in the
city and contributed to the crash, according to the NYSE's Web
site. The crisis ultimately prompted the creation of the Federal
Reserve system.
``Closing on Good Friday doesn't appear to coincide with
any market panic or crash,'' said Ray Pellecchia, a spokesman
for the Big Board. The exchange's records go back to 1864 and
show trading only on those three Good Fridays in the late 19th
and early 20th centuries, he said.
Only Non-Federal Holiday
The Friday before Easter is the only one of nine stock-
market holidays that isn't also a federal holiday. Other U.S.
stock, options and derivatives exchanges, including the Chicago
Mercantile Exchange, are also shut today. The Securities
Industry and Financial Markets Association recommends that bond
markets close in Japan, the U.K. and the U.S.
The exchange has a rich Irish-Catholic heritage and was
once steeped in religious observances, said Peter Kenny, a
managing director of institutional sales at Knight Equity
Markets in Jersey City, N.J., who worked at the NYSE for 28
years. That made trading on Good Friday out of the question, he
said.
``It was never open to debate, never, ever,'' said Kenny,
whose grandfather, legendary U.S. government bond trader
Christopher Devine, built Our Lady of Victory chapel near Wall
Street for convenient confessions. ``People were expected to go
to Our Lady of Victory on Wednesday and Thursday, all of Holy
Week.''
`Insufficient Demand'
Bruner, the author, said there's a simple explanation for
why markets shut down on Good Friday: ``The financial
institutions close on holidays, frankly, out of the belief that
there is insufficient demand, insufficient trading activity and
insufficient business,'' he said. ``I doubt the theory that
closing on Good Friday was related to the panic of 1907.''
Nelson, president of Nelson Roberts Investment Advisors in
Palo Alto, California, said he has no idea whether there's truth
to what he was told by his father, Philip, who worked in
Manhattan's financial industry for almost 20 years before moving
to the West Coast.
``It's one of those things,'' Nelson said. ``Wall Street
lore.''
Sean Hyman
Editor/Trader
www.money-trader.com
