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%.

Global investors' pessimism about the short-term outlook for the U.S. stock market has eased this week, mainly because the recent release of U.S. economic data has significantly boosted expectations for two rate cuts in September and twice this year, rather than just one rate cut hinted at by the latest Fed rate dot plot.

In the latest survey of retail investors' long/short sentiment conducted by the American Association of Individual Investors (AAII) as of the week of July 3, only 26.1% of respondents said they believed the market would trend downwards in the next six months, down from 28.3% last week and well below the historical average of 31%.

As rate-cut expectations soar, 'rate-cut trades' continue to boost investor sentiment in the US stock market. As of the week of July 3, neutral sentiment among retail investors in the US stock market has also increased, with about 32.2% of investors believing that the market direction has not changed, up from 27.2% a week ago. Compared to the peak of nearly 45% bullish sentiment for the US stock market in June, bullish sentiment among surveyed investors for the US stock market's next six months has slightly cooled off, with nearly 42% holding a bullish view.

The drop in the May core PCE price index in the US has relieved investors, as this index is a preferred measure of inflation among Fed officials.

Fed officials said at the monetary policy committee meeting in June that they are looking for more favorable inflation data to gain further confidence in combating the inflation process in the right direction, and they acknowledged that they have made 'modest further progress' in achieving the 2% inflation target.

Fed Chairman Powell's recent remarks on inflation have also soothed market sentiment, with Powell stating that 'we have made significant progress in bringing inflation back to our policy target. The most recent inflation data, as well as the prior readings, show that we are moving back towards our target range.' Before we begin to ease our policy stance, we want to be confident that inflation is sustainably returning to our target at a 2% level.'

Recent economic data also support the Fed's argument for an early start to its first rate cut. In the first half of this year, US economic growth slowed significantly, which is closely linked to the Fed's long-term policy of maintaining high interest rates (i.e., higher for longer) to comprehensively raise borrowing costs and the impact of sustained inflation in the US.

Revised economic data show that in the first quarter, the core engine of the US economy, personal consumption expenditure data, was revised down by 0.5 percentage points from the initial value, with the final value converting to an annualized quarterly rate of only 1.5%, a significant slowdown from the 3.3% growth rate in the previous quarter.

If personal consumption continues to slow down, the US economy seems to be getting closer and closer to a recession. Consumption is the 'core driving force' of the US economy, with all consumption items accounting for 70%-80% of US GDP. However, the latest revised economic data show that there are visible cracks in the US labor market in the first quarter, and consumption has slowed significantly.

Other data collectively show that every corner of the US economy is confirming a slowing economic growth and that the recession argument is making a comeback. For example, some commercial equipment orders and shipments have fallen, the trade deficit is at its highest level in two years, the job market is showing signs of weakness, and housing purchases have declined across the board.

On Wednesday, US "little non-farm" ADP employment data showed that private-sector salary growth in June was lower than expected, and weekly initial jobless claims were much higher than expected. As of the week of June 22, the number of ongoing claims for unemployment benefits increased to 1.86 million, the highest level since November 2021. The June ISM services PMI in the US fell well short of expectations, and the shrinkage of service activity was the fastest in four years.

Quincy Krosby, a global strategist at LPL Financial, said that given the data showing that the US economy is cooling down, Friday's non-farm employment data could be decisive for the Fed, because the central bank is looking for reasons to signal a loose monetary policy. The non-farm data will help clarify the basic state of the labor market, with weak non-farm employment data potentially further pushing down overall income and further weakening US consumer spending.

However, weak earnings among heavyweight high-market-cap stocks have reduced the number of investors who are optimistic about the short-term outlook for the US stock market.

Up to 41.7% of the surveyed retail investors expressed optimism about the future direction of the market in the next six months, down from 44.5% last week. The bullish and neutral data are higher than the historical averages of 37.5% and 31.5%, respectively.

Last week, Wall Street digested a shocking warning from the leader of sport consumer goods, which stated that sales this quarter will fall 10%, causing the stock price of the sportswear giant to fall more than 10% in after-hours trading following the earnings report release.$Nike (NKE.US)$Likewise, the stock price of the chain drugstore operator fell more than 5% last Thursday after the company lowered its full-year outlook due to the challenging U.S. retail environment.

The U.S. benchmark index--dow jones--rose nearly 1% last week, while the trade-sensitive index--nasdaq--rose slightly. Focusing on technology stocks, consumer outfits and other technology giants such as Apple and Amazon both rose nearly 2% last week, reflecting the market's continued optimism.$Walgreens Boots Alliance (WBA.US)$Last Thursday, the stock price fell by more than 5%. Previously, the company lowered its annual expectations due to the severe situation of US retail overall.

"The main markets have begun to cut interest rates, and the Federal Reserve is expected to begin easing the two-year-long aggressive monetary tightening policy as late as December at the latest. The upcoming election may bring pressure to the market, but the global economy is still in a relatively good state," according to a recent analysis report from Seeking Alpha.

The benchmark index for the US stock market -$S&P 500 Index (.SPX.US)$rose nearly 1% in the past week, while$Dow Jones Industrial Average (.DJI.US)$rose slightly. Focusing on technology stocks$Nasdaq Composite Index (.IXIC.US)$ and $NASDAQ 100 Index (.NDX.US)$The latest weekly gains of technology stocks such as Facebook, Apple, Amazon, Netflix and Google-parent Alphabet surpassed both the S&P 500 and dow jones, both up nearly 2%, indicating that market sentiment on the technology giants remained dominant.$NVIDIA (NVDA.US)$, $Microsoft (MSFT.US)$and $Alphabet-C (GOOG.US)$/$Alphabet-A (GOOGL.US)$Global investors' pessimism about the short-term outlook for the U.S. stock market has eased this week, mainly because the recent release of U.S. economic data has significantly boosted expectations for two rate cuts in September and twice this year, rather than just one rate cut hinted at by the latest Fed rate dot plot.