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%.

Since Trump's victory, global stock markets have experienced significant divergence, with the US stock market market cap surging by $1.8 trillion, while emerging markets lost $500 billion, and EAFE markets evaporated $600 billion. Bank of America strategist Michael Hartnett advises investors to adjust their investment portfolios before Trump's inauguration ceremony in January, focusing on US treasuries, Chinese and European stocks, as well as gold.

Hartnett points out that as American financial conditions tighten, the market is prepared for Trump's aggressive policies, showing aggressive asset trends. He warns that although the stock market may continue to rise, the tightening financial environment and the digestion of Fed rate cut expectations have caused cracks in leveraged assets, and rising long-term rates may trigger risk reversals.

Hartnett emphasizes that investors are prepared for US risks on inauguration day, but further tightening of financial conditions will change the trade landscape.

Bank of America's global fund manager survey in November shows that investors have raised their expectations for US economic growth and inflation and shifted their confidence towards small-cap stocks.

He predicts that when cracks appear in Trump's trade policies, it will bring a "TINA (There Is No Alternative) Turner" moment, meaning there will be no other trade choices except to go long on the dollar, US stocks, and short on US Treasury bonds.

The strong performance of global macro data may be one of the key factors driving the tightening of American financial conditions, Hartnett's analysis indicates that the reason behind this may be companies taking proactive measures to respond to tariff policies.

Specifically, in October, the growth rate of exports in china reached its highest point since July, the import volume at California ports surged, the number of unemployment claims in the usa significantly decreased, and the pessimism among small businesses is beginning to shift. These positive signs of economic activity come against the backdrop of a rebound in usa inflation hitting its lowest point, with the core inflation rate dropping to a new low of 3%.

In terms of investment strategy, Hartnett advises:

1. Buy usa Treasury bonds if the yield rises to 5%. He believes the Federal Reserve will keep interest rates unchanged through 2025 to curb inflation expectations, while usa Treasury bonds will force the Trump administration to lower tariffs. He points out that the new government allowing a second wave of inflation would be political suicide, and although it is difficult to reverse the long-term trend of usa government debt and spending, the new government's awareness of the massive debt and spending indicates a reduction in fiscal expenditure.

2. Purchase stocks in china and europe before taking office. Hartnett believes that china and europe will actively respond to the usa's "America First" tariff policy, and the low interest rates, currency devaluation, and low oil prices in asia and europe will significantly ease financial conditions.

3. Buy gold. Hartnett expects that a demographic turning point is approaching, with the dependency ratio reaching a low of 53% by 2028, marking the peak of a "de-inflation" demographic structure; the increase in energy demand brought about by ai makes gold (and cryptos) the best tools for long-term inflation hedging.

Editor / jayden