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
Ole Hansen, the head of commodity strategy at Saxo Bank, said that geopolitical risks, fiscal concerns, and the potential for changes in monetary policy, especially after the US presidential election, together constitute a bullish case for gold as a hard asset.
Gold has recently performed strongly, with a cumulative increase of over 20% so far this year, reaching a high of $2531.75 in August. This makes it an attractive investment.
Ole Hansen, Head of Commodities Strategy at Saxo Bank, said that geopolitical risks, fiscal concerns, and potential changes in monetary policy, especially after the US presidential election, together constitute the bullish reasons for gold as a hard asset.
As of early September this year, gold has easily outperformed the S&P 500 index, with an increase of over 22% since the beginning of the year, exceeding the roughly 15% and 12% increase of the S&P 500 index and the Nasdaq 100 index respectively. At the time of writing, spot gold rose by 0.10% to $2519.00 per ounce.
Shengbao Bank continues to be bullish on the future trend of gold, citing the following reasons:
Excessive fiscal spending. The uncertainty surrounding the upcoming US presidential election has brought strong anxiety to fiscal policy and overall market stability. "In the case of an economic slowdown, any government will inevitably expand the deficit. It seems that neither party is likely to implement fiscal austerity policies, which will increase inflation risks and be favorable for gold."
General safe-haven appeal. Gold has always been a safe haven during times of economic difficulty. "If we are headed towards a recession, the economy may soon end the incredible stock market rally. The bond market and its recent 'yield curve inversion' seem to be telling us this."
Fed rate cuts. Whether the economy is experiencing a slight slowdown or a full-scale recession, the Fed's monetary policy decisions will play an important role in shaping the trend of gold. The lower interest rate environment enhances the appeal of gold.
Geopolitics and de-dollarization. In addition, the broader global environment characterized by geopolitical tensions, central bank efforts to de-dollarize, and economic uncertainty continue to support the demand for gold.
Shengbao Bank added that attention should be paid to the meaning of the term "hard assets", and gold should always be seen as something that maintains its value rather than something whose actual value will rise significantly. Hansen said that investors may continue to see gold as a hedge against economic and policy uncertainties.
Editor/rice