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%.

A few hours before the Bank of Japan is about to announce its latest policy decision meeting, Japan's key inflation indicators in August accelerated for the fourth consecutive month. According to data released by the Japanese Ministry of Internal Affairs on Friday, the consumer price index, excluding fresh food, rose by 2.8% year-on-year, slightly higher than the 2.7% in July, in line with market expectations.

It is widely expected in the market that the Bank of Japan will maintain the benchmark interest rate at 0.25% later on Friday. Economists will closely monitor Bank of Japan Governor Haruhiko Kuroda's statement on the prospect of further rate hikes in the coming months. More than half of the observers expect the Bank of Japan to raise rates again in December.

The Bank of Japan has indicated plans to further raise rates if inflation remains as predicted, as real interest rates are still at relatively low negative levels. Currently, the Bank of Japan's main inflation index has stayed above the Bank's 2% target level for 29 consecutive months.

Yukio Kokonoe, an economist at the Meiji Yasuda Institute of Comprehensive Research, said, 'With prices remaining relatively stable, the Bank of Japan can be said to be moving towards the 2% price stability target. It is still possible for a rate hike within this year.'

Bloomberg economist Taro Kimura commented, 'The rise in Japan's CPI in August could boost the Bank of Japan's confidence that inflation is supporting potential price trends, driven by wage growth.'

A deeper index, excluding energy costs and fresh food prices, rose by 2%, higher than July's 1.9%. The Bank of Japan views service prices as a key indicator of price trends, with this index rising by 1.4% compared to the same period last year, unchanged from July.

Shortly after the Bank of Japan raised interest rates in July, global markets experienced a sharp downturn, and the Bank of Japan's communication strategy was questioned. Subsequently, officials explained the policy position of the central bank, and Deputy Governor Nishida Junichi stated that the Bank of Japan would not raise interest rates in market instability. Other officials, including Ueda Kazuo, emphasized that if prices and the economy meet the central bank's expectations, the Bank of Japan will continue to raise interest rates.

It is worth noting that against the backdrop of global market volatility, the Bank of Japan's policy-making is at a delicate moment. After the Federal Reserve's significant interest rate cut, any more hawkish signals from the Bank of Japan could further push up the yen and potentially put pressure on the stock prices of Japanese exporters.

With both households and businesses increasing their spending, the Japanese economy rebounded in the second quarter. Policymakers hope that strong wage increases this year will help households better cope with inflation and allow the so-called virtuous economic cycle to take root. Real wages in Japan have risen for two consecutive months.

At the same time, inflation has been a key issue in the campaign for the next Japanese prime minister. Among the nine candidates for the ruling party's leadership election, some have called for further measures to help alleviate consumer pain, which could mean they will fulfill the promises of Prime Minister Fumio Kishida's economic package later this year.

Although most of the leadership candidates support the current position of the Bank of Japan, Minister of Economic Security Sanae Takaichi has a more moderate stance, stating that the Bank of Japan should be more cautious about raising interest rates, as higher rates could deter young people from buying homes or prevent companies from investing. The leadership election of the Liberal Democratic Party will be held on September 27.

Editor / jayden