Queen Birthday Holiday: ASX vs Dow Jones

In Australia, every Monday in the second week of June, we enjoy a public holiday dubbed as “Queen Birthday Holiday”. This year’s holiday was on Monday, 9 June 2008.

(As member of Commonwealth nations, Australia’s head of state is in fact Queen of England, hence the public holiday. The funny things is the actual birthday of the Queen is on 21st April. So, some people marked the day as the start of snow season here in the southern hemisphere.)

The Tumble

As we know, on Friday 6 June 2008, Dow Jones Industrial Index fall dramatically by almost 400 point due to a surge in unemployment figure from 5.0% to 5.5% (the expectation was 5.1%), crude oil shoot $16 up in the trading session before closing $11 up at $138.5 a barrel.

And from an event like that, usually the market will bounce back the next day as buyer who sitting on the fence will jump in and also because short sellers need to cover the position and buy back the stock.

And we also know that the rest of the world, especially Australia and Asia, will usually follow any significant lead from US market, i.e: Dow Jones the next day.

Since the next trading day is public holiday in Australia, how does the market react accumulatively ?

Easter Holiday 2008: ASX didn’t miss out millions on Dow Jones lead

For once, I did not know that US market open on Easter Monday.

Well, as we all knows, Dow Jones is the leading indicator in the world and without exception, Australian Stock Exchange will follow every strong lead (read: I would say any 100+pts movement) from the Dow the day after.

On 18-Mar 2008, when the Fed cut that interest rate and send DJI went up 420 pts (3.5%), AORD (Australian’s All Ordinaries Index) was also went up 3.6% (185 pts) the day after. See the graph and table below.