What is the Weekend Effect?
The weekend effect is a theory that stock prices rise on Monday and fall on Friday.
How Does the Weekend Effect Work?
The idea behind the weekend effect is that companies tend to release bad news on Fridays, when the market has the weekend to digest the news and not react as negatively on Monday.
Why Does the Weekend Effect Matter?
Whether the weekend effect actually exists is controversial and often a matter of academic study. Regardless of its consistent appearance, the weekend effect is a reminder that more things affect stock prices than just earnings. Timing is also a factor.