Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.

The number of initial jobless claims in the USA increased slightly last week, but the potential strong trend in the job market may continue to support the US economy. Data released by the US Department of Labor on Thursday showed that as of June 1, the seasonally adjusted initial jobless claims in the United States increased by about 8,000 from the previous week to 229,000 people, slightly higher than the widely expected figure of about 220,000 people by economists. The data largely reflects the signal that the number of initial jobless claims in the United States has been continuously emitting since 2024 - that is, the US job market is very resilient.

Since March 2022, the Federal Reserve has started a radical rate hike cycle, raising the benchmark interest rate by about 525 basis points to reduce the once-high inflation rate of up to 9% in the United States. But the optimistic side is that since the Fed’s rate hike, the US labor market has been steadily recovering to the low unemployment rate level before the COVID-19 epidemic, and there has been a hot job trend since the second half of 2023.

The latest unemployment benefit application report also shows that in the week ending on May 25, the number of "continuing jobless claims" which tracks the number of people who have received unemployment benefits for more than one week has increased by about 2,000, that is, the latest seasonally adjusted number of continuing jobless claims is 1.792 million, which is basically consistent with economists' expectations.

Data earlier this week showed that the decline in US job vacancies in April far exceeded market expectations, and the number of employable positions per job seeker reached its lowest level since June 2021, indicating that the previously hot US job market has cooled significantly. The cooling signal in the labor market will undoubtedly stimulate the Fed to open the cycle of rate hikes and then rate cuts as early as possible.

At the same time, according to data from Challenger, Gray and Christmas, an occupational introduction company, the scale of layoffs in the United States has not continued to expand, reflecting that the overall labor environment has not deteriorated. The number of layoffs announced by US employers last month was the smallest since December last year, and is also behind last year's number of layoffs announced since 2024.

US employers announced 63,816 layoffs in May, a decrease of 1.5% from the 64,789 announced in April and a decrease of 20% from the 80,089 announced a year ago. The number of layoff announcements so far this year is about 7.6% lower than in the first five months of 2023.

Regarding the non-farm employment data that will be released tomorrow and will have a significant impact on the expectation of rate cuts and the trend of US stocks, a report released by Bank of America pointed out that the "appropriate range" for the number of non-farm employment added in May is 125,000 to 175,000. If this goal is achieved, the stock market may usher in a rebound.

Bank of America strategists pointed out that if the number of non-farm employment added in May is less than 125,000, it will be bad news for the stock market and may lead to sell-offs. The main logic is that such pessimistic readings may indicate that economic growth is deteriorating. The strategists wrote: "The number of employment growth below 125,000 may increase the huge risk of triggering the Sam rule, thereby rekindling market concerns about economic recession."

The Sam rule refers to the early stages of economic recession when the three-month moving average of the unemployment rate rises by 0.5 percentage points or more relative to its low point in the past 12 months.

Bank of America expects the number of non-farm jobs added in May to show an increase of about 200,000 jobs that month. "There is little evidence to suggest that hiring activity is cooling significantly or that the number of unemployed is increasing rapidly. The number of initial claims for unemployment benefits is still at a low level, and our internal credit card consumption data shows that the US consumer side is still supported by strong salaries," the Bank of America report said.

Editor / jayden