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%.

Morgan Stanley strategist Michael Wilson suggests investors should lock in the returns on US defensive stocks as their recent outstanding performance makes their valuations look high.

Led by Wilson, the team at Morgan Stanley holds a neutral stance on so-called defensive stocks related to cyclical sectors related to the economy, they are waiting for 'clearer' employment data, the bank believes employment data is a key driver of the year-end stock market.

The bank's strategist wrote in a report: 'It makes sense to take profits from the recent outstanding performance of defensive stocks without knowing the results of the next labor report.'

In recent months, due to concerns about the US economic recession, investors have flocked to stocks considered relatively immune to economic downturns, such as medical care and utilities. Since the end of June, a basket of defensive stocks at Citigroup has risen by about 11%, outperforming a similar cyclical stock index increase of 8.5%.

However, last week the Fed's first rate cut in four years helped alleviate concerns about economic growth, with the S&P 500 index hitting a historic high after the rate cut decision, traders expect more easing policies before the year-end.

The Morgan Stanley team stated that defensive stocks typically perform 'mildly' in the month following the Fed's first rate cut. However, they note that defensive stocks continue to perform well over a period of 3 to 12 months.

Wilson is one of the most notable stock market bears to watch before mid-2024. In Monday's report, he reiterated his preference for large cap stocks with strong profit prospects.

Citigroup, Barclays, and other market strategists are also more optimistic about cyclical stocks, especially in Europe. Sectors such as autos and retail, which are more sensitive to macroeconomic factors, make up a significant portion of the region's benchmark index.

However, JPMorgan strategist Mislav Matejka stated that despite expectations of declining bond yields, downgrades in profit ratings, and 'unattractive valuations', he still remains bearish on European cyclical stocks.

Editor / jayden