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%.

Although bond traders have reignited their bets on a Fed rate cut, PGIM Fixed Income says the Fed may actually lean toward raising rates. The asset management company with an AUM of $1.34 trillion still insists on reducing its holdings of US Treasuries. The company has held the view for the past two years that the market is too confident in its ability to lower inflation to the level targeted by the Fed policy rate. The global head of bonds at the company, Robert Tipp, said, "If core inflation continues to rise by 0.3% on a quarterly basis in the next few quarters, I think they will have to shift from an easing bias to a tightening bias."

Despite Fed Chairman Powell's insistence that the Fed is in no hurry to change policy, bond traders have increased their bets on a rate cut. This week's release of US inflation data weaker than expected has prompted traders to expect the Fed to cut rates by nearly 50 basis points before the end of the year, higher than the Fed's revised 25 basis points quarterly dot plot forecast.

Tipp said in an interview, "the market consensus is that there will be a lot of rate cuts in the future, and bond yields will decline. In the next six months, I think this view must change."

Tipp said that the yield on 10-year US Treasuries is expected to rise to 4.5% this year. This is about 30 basis points higher than last Friday's trading price. He said that mid-term Treasury bonds in the yield curve will still be unpopular due to unfavorable factors such as inversion, high issuance, a low probability of central bank rate cuts and rising inflation.

Tipp said that the rate cut will be slower than expected, which is not conducive to taking on interest rate risk. He prefers high-grade corporate bonds from developed markets, as well as sovereign bonds from Australia, Switzerland, Thailand, and Brazil, and hedges based on their relative value. He said that the Fed may not be able to determine whether it is "tough enough. The fact is, the average inflation rate is higher than the target, and the economy is still very strong."

Editor / jayden