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%.

Huge debt, financing crisis, and sharp drops in real estate prices are looming over the commercial real estate market in the USA, posing a threat to investors and banks. However, Goldman Sachs Asset Management remains bullish on the commercial real estate debt that others are concerned about. Lindsay Rosner, the head of investment in multiple departments at the company, said, "Just because there are some problem properties with very high vacancy rates, and issues with their funding or debt costs, doesn't mean that the entire asset class has problems." "What we can do is find a lot of opportunities in Commercial Mortgage-Backed Securities (CMBS)."

Lindsay Rosner described CMBS as a "nervous" market, and she focuses on "very special, very popular properties". She pointed out that being picky is worth it, as remote work continues to exist, and offices are unlikely to fully recover.

Lindsay Rosner stated that Goldman Sachs Asset Management also sees value in the debt for industrial warehouses used for logistics, and the company prefers CMBS relative to corporate bonds. Despite pessimistic predictions that the pandemic will lead to building vacancies and a large number of defaults, the performance of commercial real estate bonds this year is still better than investment-grade corporate bonds. She said: "There is indeed relative value (in CMBS). It is a very good part of our portfolio. We believe it has generated a considerable amount of arbitrage."

Lindsay Rosner is generally optimistic about the outlook for the credit market, because there is still yield, although the economy is weakening. However, she believes there is only a 15% to 20% chance of a recession in the USA.

In terms of investment-grade bonds, Goldman Sachs Asset Management is bullish on financial bond issuers. Lindsay Rosner stated that, on the basis of excess returns, the performance of financial bonds is better than other bonds, "not just the central banks in the USA, but also opportunities in the French banking industry due to the uncertainty in the French political situation."

Meanwhile, due to the high cost of green transformation, Goldman Sachs Asset Management is avoiding bonds issued by the utility sector. Lindsay Rosner said: "This will only make their balance sheet different from what we think is favorable to bondholders."

Lindsay Rosner tends to favor companies with BBB ratings because these companies hold onto cash and do not increase leverage. Additionally, given that the US bond yield curve may steepen after the US election, Lindsay Rosner prefers short-term US bonds. She said: "Neither of the presidential candidates has proposed fiscal contraction plans. The US bond yield curve might really steepen." She added that in this scenario, the 3-5 year US bonds seem most attractive.

Editor / jayden