The term weekend effect is used to describe a historical trend, whereby financial markets tend to decline more on Monday if there was a decline on the preceding Friday. The weekend effect is believed to be a result of increased investor pessimism on Saturday and Sunday.
Financial markets, such as commodities, bonds, and stocks, typically demonstrate an upward or downward trend over time. Generally, if there was a decline in a financial market on a Friday, the same financial market would be expected to decline to a greater extent on the following Monday.
The weekend effect is of extremely short duration, spanning across only three days. This phenomenon has been validated via a number of scholarly studies; however, the exact reason for this effect is uncertain, but is believed to be a result of the following factors: