How Rosh Hashanah influences the stock market

By Anna Sheinman, September 20, 2011
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Researchers have discovered that Jews control the stock markets – for two days of every year.

A new study by academics at Nova Southeastern University in Florida shows that Rosh Hashanah has an impact on the stock market.

"Observant Jewish traders represent a small proportion of all market participants," said Pan Yatrakis, a professor of finance and economics at the university. "But, at the margin, their withdrawal during the High Holy Days thins out the market, increases volatility and risk, and may discourage others from trading as well, thus creating a snowball effect."

Mr Yatrakis co-authored the study with Albert Williams, an assistant professor of finance and economics.

The pair looked at the daily closing values of the Dow Jones Industrial Average on the three trading days before Rosh Hashanah and the three trading days after Yom Kippur, between 1907 and 2008.

They found that the "Jewish Holiday Effect" yields a one per cent return, meaning that if £1 million worth of stock was sold around Rosh Hashanah, then bought back at Yom Kippur, a person should make around £10,000 profit.

The two professors are not the first to investigate the phenomenon.

A 2003 paper from Indiana's Mendoza College of Business found that Yom Kippur dampened trading in companies located in cities with a high Jewish population. The following year, researchers found that there was a bullish market at Rosh Hashana, and that there was a similar effect on St Patrick's Day.

    Last updated: 2:25pm, September 20 2011