WASHINGTON – Good afternoon, investment fans! Short column today as Mr Market thrashes about yet again. It’s the usual headline risk game. Stocks keep gyrating up and down, depending on whether investors (or high-speed machines) think the US and China will ink some kind of glorious trade agreement this week. Or not. Or something in-between. Given this impasse, we thought we’d take a break and explain how trades and settlement dates will go down on October 14, 2019 in Columbus Day markets.
So, what about Columbus Day, stocks and bonds?
Columbus Day is one of our weirder Federal holidays. Federal holidays generally means that Federal government employees, and many state and local government employees get to take the day off. Federally chartered banks are also closed on these holidays. And indeed, most of us working stiffs also get the day off. But not so much on Columbus Day.
As long as I can remember, this was always the case, even in the days before we realized that Columbus was likely not the very first dude to have discovered America. Of course, now the whole thing has become a political hot potato, like everything else. But we won’t get into that here.
More to the point, Columbus Day is now, for most, NOT a day off from work, unless you’re in government or in the banking industry. And it’s not even a day for Wall Street and brokerage professionals. So trading and investing in equities markets in general is business as usual. Which is what makes trading in Columbus Day markets a little non-standard.
Equities trade but bonds do not. And settlement dates change.
However, banks are still closed and “fixed income” investments (like bonds) will not trade.
For that reason, the most important thing for traders and investors to note is that the settlement date for most trades that intersect Columbus Day markets is (technically) one business day longer than usual. Because Columbus Day is not a business day.
Let’s simplify it all by offering the following chart. The info here will be most important for those looking to cash out of investments quickly over the next couple of trading days.
Columbus Day 2019 Trading and Settlement Schedule
Friday, October 11, 2019
A normal trading day. But due to the upcoming Columbus Day holiday, your settlement date will likely change, as in the chart below.
Monday, October 14, 2019
As noted in our opening paragraphs, today is a Federal and bank holiday in observance of the Columbus Day Federal holiday.
U.S. equity, options, and futures markets will be open as usual in active Columbus Day markets. But the 14this a non-settlement day. (I.e.,a day when you can take out cash from your account from an earlier trade. Except that today, you can’t.) Settlement dates appear in the chart below.
All Fixed Income and Bond markets will be closed.
For most brokerage accounts, requests to move money that are received after standard cut-off times on Friday, October 11, 2019, won’t get processed until Tuesday, October 15, 2019. Because of the Monday holiday.
Settlement Dates for Equity Orders:
|Trade Date||Settlement Date|
|Thursday, October 10, 2019||Tuesday, October 15, 2019|
|Friday, October 11, 2019||Wednesday, October 16, 2019|
Settlement Dates for Options and Futures Orders:
|Trade Date||Settlement Date|
|Friday, October 11, 2019||Tuesday, October 15, 2019|
Canadian Markets on Canada’s Thanksgiving Day
Surprise! For those not already aware of this, Monday is also Canada’s Thanksgiving Day. And that’s a big time national holiday for our friends to the north. As a result, all Canadian markets will close in observance of Canadian Thanksgiving. Dually listed Canadian stocks (stocks that trade in both the US and [mostly] on the Toronto Exchange) will trade in the U.S. markets on Tuesday, October 15, 2019.
That’s it for now. In short, at least for American investors, Columbus Day is only sort of a holiday. Both we, the machines, and all the usual Robber Barons will be at it again on Monday, except for bonds. And it’s important to know this. Given that either good or bad craziness is still likely to erupt once the latest communiqué gets issued from the current US-China trade war confab, Mr Market could, once again, decide to go wild. One way or the other.
So don’t ignore the action on Monday, October 14. It could be one of those days with relatively low volume due to those taking the holiday and ignoring their portfolios. Meaning that the 24/7 machines could go wild on the latest US-China or impeachment fantasy headlines. And if they go wild in a way small investors haven’t anticipated, portfolios could take a sizeable hit.
Be forewarned and be prepared. And if you are, enjoy the Columbus Day holiday. Assuming your company gives you the day off.
— Headline image: “Landing of Columbus” (12 October 1492). Painting by John Vanderlyn.
(Public domain image via Wikipedia entry on Christopher Columbus)