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%.

Financial market volatility often accompanies uncertainty, and Donald Trump's impromptu style seems to be the catalyst for this uncertainty. Global quick-money traders view this as an opportunity, relying on the market's dramatic fluctuations to achieve profitability. On the eve of the first debate between Trump and Joe Biden, investors are trying to predict the potential impact of the Republican return to the White House on various industries, from electric vehicles to the direction of long-term interest rates.

In general, while the market generally hates uncertainty, for some hedge funds, any significant market volatility, regardless of political winds, is an opportunity for them. Looking back at the market dynamics during Trump's tenure, his comments and social media posts are often unexpected, causing short-term market volatility and providing rich trading opportunities for traders.

Calvin Yeoh, portfolio manager at Singapore hedge fund Blue Edge Advisors, admits that traders prefer Trump's unpredictability because market volatility brings them opportunities. Although the market has also undergone major shocks such as soaring inflation, the Russo-Ukrainian conflict, and Fed rate hikes during Biden's tenure, Biden tends to favor traditional policy communication methods, while Trump prefers to communicate directly with the public through social media, bringing more immediate reactions to the market.

With the election approaching, the market's attention to the election results is gradually increasing, despite the speculation about economic performance and Fed policy. Vineer Bhansali, founder of asset management company LongTail Alpha, pointed out that the market is prepared for the turbulence Trump may bring, and if Trump wins and market volatility decreases, it will be unexpected.

Trump's unexpected victory in 2016 had a severe impact on the bond market, as the market expected his tax-cut plan to boost the economy and prompt the Fed to accelerate its rate hikes. This expectation pushed up the yield on 10-year U.S. Treasuries in December by close to 1 percentage point.

During Trump's tenure, his comments and social media activity often became the trigger for market turbulence. In 2017, Trump proposed that Puerto Rico's debt should be forgiven after the hurricane disasters. This statement led to a sharp drop in Puerto Rico bonds prices. However, when the market realized that the debt issue would be handled by the courts, bond prices gradually rebounded. In 2018, Trump's criticism of Amazon and the escalation of the trade war in August 2019 both sparked sharp market volatility, and the S&P 500 index saw more than 1% gains and losses in trading days that month.

Some long-term investors also expect Trump's policy changes to create new investment opportunities. For example, Carol Lye, portfolio manager at Singapore's Brandywine Global Investment Management, cited the Mexican peso's decline and subsequent rebound following Trump's promise to build a border wall.

As election day approaches, Trump's policy stance and campaign promises are becoming more of a focus for Wall Street. Trump and the Republicans have made it clear that they will push to extend the tax cuts implemented in 2017, while Biden and the Democrats have indicated they hope to at least extend some of the tax cuts.

Trump is also expected to take more aggressive measures to expel illegal immigrants and take a tough stance on trade policy. These measures may bring upward pressure on inflation and affect market expectations for Fed rate cuts.

In addition, some of Trump's informal advisers have proposed ideas for reforming the Fed, although these ideas have not received clear support from Trump and his campaign team. The market is concerned that such reforms could put political pressure on the Fed, resulting in rate cuts motivated by politics and disrupting the bond market.

George Boubouras, research director at K2 Asset Management Ltd., emphasized that every word of Trump's, whether he wins or not, could have an amplified effect on global markets. While the market likes volatility, traders are also working to avoid getting too caught up in the emotional fluctuations that Trump may bring.

Trump's impromptu style and policy stance have brought uncertainty to the market, but at the same time have provided rich opportunities for traders who can seize market volatility.

Editor / jayden