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%.
According to the latest survey by Bank of America, fund managers' optimism continues to rise and almost no one expects a hard landing for the US economy.
A survey of 238 fund managers who manage $721 billion in assets in June showed that their sentiment index (based on cash levels, stock allocation, and economic growth expectations) rose to its highest level since November 2021.
The percentage of fund managers who expect an economic hard landing decreased from 11% in May to 5% in June. The percentage of fund managers who expect a soft landing rose to 64%, while the percentage of fund managers who don't expect either landing decreased to 26%.
More than 50% of respondents still expect no economic recession in the next 18 months, but this is lower than the 53% in May, and expectations for an economic recession in the second half of 2025 are rising. As for the Fed, 78% expect two, three, or more rate cuts next year.
Strategist Michael Hartnett wrote:"'Long the Magnificent Seven'--Apple (AAPL.US), Microsoft (MSFT.US), Google (GOOGL.US), Amazon (AMZN.US), Nvidia (NVDA.US), Tesla (TSLA.US), and Meta (META.US)--have been the hottest trades for the 15th consecutive month and are currently the most crowded trades, accounting for 69%."
"In the history of this survey, the proportion of single trades more crowded than this is rare...In October 2020, the proportion of 'long US technology stocks' was 71%, In September 2020, the proportion of 'long US technology stocks' was 80%, in July 2020, the proportion of 'long US technology stocks' was 74%, in June 2020, the proportion of 'long US growth stocks' was 72%, and in February 2015, the proportion of 'long US dollar' was 72%."
Other crowded trades include long gold, long US dollar, and long bitcoin.
Hartnett said:"32% of respondents still consider 'inflation intensification' as the number one tail risk, but this is significantly lower than 41% in May. Concerns about geopolitics have risen from 18% in May to 22%, still ranking second. Risks related to the 'US election' have risen from 9% to 16%, ranking third."
Editor/Lambor