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: Yu Jing

JPMorgan strategist Mislav Matejka stated that unless geopolitical and trade policy risks diminish, the USA's dominance over other parts of the world is unlikely to weaken.

Since the beginning of this year, driven by the technology and ai boom, the usa stock market has continued to outperform the international stock market. At the same time, the us economy remains resilient, as the Federal Reserve has entered a rate-cutting cycle against the backdrop of declining inflation.

"The current phenomenon of polarized performance in regional markets may persist," Matejka and other strategists wrote in a report released on Wednesday. "The price-to-earnings (PE) ratio in international markets does not seem high, while the USA market remains elevated, but the relative spread is likely to remain high for some time."

In 2024, the S&P 500 index rose by 26%, setting multiple historical highs, while the MSCI Global (excluding USA) index only increased by 3.5%. The valuation gap also widened, with the PE ratio of USA stocks currently 60% higher than that of international peers, based on expected PE ratios.

Trump's electoral victory further solidified investors' preference for USA assets, as traders anticipated that his policies would trigger global trade tensions. The president-elect has already set plans to impose tariffs on imported products from Mexico, Canada, and China, with Europe possibly being the next target.

JPMorgan's strategist pointed out that given the extreme positioning of the usa stock market, as well as the valuation and performance gap with international peers, there is potential for convergence. "However, we still believe that a clearer understanding of trade and geopolitical aspects is needed before making a transition," they stated.

Matt Yeka maintains a cautious overall attitude towards the stock market for the first half of next year, urging investors to focus on the Federal Reserve's policies, the trend of the dollar, and earnings growth forecasts, as he believes these forecasts are too optimistic, especially in europe.

He stated, "The factors mentioned above, combined with increasing geopolitical uncertainty, may mean that the stock market performance in early this year will be mixed, as the series of pressures will be resolved, and a recovery will follow."

Editor/Jeffy