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%.
Author: Zhao Jinbin

Goldman Sachs' senior technology analyst Kash Rangan said that to drive the large technology stocks in the USA higher again, it needs the strong support of a 'magical moment'. The bank points out that the formula for this magical moment is the Federal Reserve steadily cutting interest rates, combined with a series of innovative breakthroughs, in order to drive profit growth by over 20%.

"We must raise the growth rate of this industry from 11% back to 20%-30%. To achieve this, we must engage in new innovations," Rangan said at Monday's Goldman Sachs Communications and Technology Conference.

Rangan is bullish.$Microsoft (MSFT.US)$And.$Salesforce (CRM.US)$, he said that the technology industry must make progress in areas such as customer upselling and monetization, and take action in the field of artificial intelligence.

"When you combine this innovation with lower interest rates, miracles happen," Rangan said.

Federal Reserve rate cuts are imminent.

As the Federal Reserve approaches the next monetary policy decision at the meeting on September 18, investors' attention is fully focused on the Federal Reserve.

Currently, the Federal Reserve has widely signaled the first interest rate cut in years to stabilize the slowing economy.

Goldman Sachs chief economist Jan Hatzius said at the conference, "I do not exclude the possibility of 50 basis points, but I think the possibility of 25 basis points is greater."

"I think there are good reasons for a 50 basis point rate cut. The reasons are that 5.375%, 5.25% to 5.5% is a very high federal funds rate. It is the highest policy rate among the G10 countries. Although in fact, the United States has actually made greater progress in inflation than most G10 economies," Hatzius added.

As for another factor, it may take more time - although new signs of innovation are emerging in the growth story of artificial intelligence.

Salesforce co-founder and CEO Marc Benioff said at the end of August that the company is about to release an AI digital agent that can help businesses achieve customer service automation. Benioff said Salesforce will charge per conversation.

At the same time, Dr. Su Zifeng, Chairman and CEO of AMD (AMD.US), unveiled a series of new AI chips up to 2026 at a conference interview on Monday.

"AI is a bigger cycle than I expected five years ago," Su Zifeng said.

It is certain that technology stocks now really need a "magic moment of innovation combined with low interest rates."

Technology stocks had the biggest single-day drop since 2022, closing down by 3% on Monday and prompting investors to flock to hedging protection.$Nasdaq Composite Index (.IXIC.US)$In September, it fell by about 5%, as investors were concerned about the slowing economic growth and took profits in popular AI trades. Investors are also worried about the slowdown in AI spending, partly due to the chip giants.$NVIDIA (NVDA.US)$The second quarter's earnings are a mixed bag of joy and sorrow.

Goldman Sachs analyst Toshiya Hari said at the meeting, "(Nvidia stocks) have not been performing well recently, but we remain bullish on the stock. First, the demand for accelerated computing remains very strong. We tend to spend a considerable amount of time on mega-scale enterprises - such as$Amazon (AMZN.US)$and$Alphabet-A (GOOGL.US)$Please use your Futubull account to access the feature.$Microsoft (MSFT.US)$ -You will see that the demand from companies is expanding, even in sovereign countries."

Editor/rice