Latest news with #StockTrader'sAlmanac
Yahoo
30-05-2025
- Business
- Yahoo
S&P 500's Banner Month Faces Off With June's Lackluster Record
(Bloomberg) -- A frenzied May rally has equity analysts bracing for an end to the run in what has historically been one of the weakest months for S&P 500 Index returns. NYC Congestion Toll Brings In $216 Million in First Four Months Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move NY Wins Order Against US Funding Freeze in Congestion Fight Why Arid Cities Should Stick Together The prospect of renewed trade-war concerns, uncertainty over the path of Federal Reserve policy and quarter-end portfolio rebalancing all risk rattling the market after the S&P 500 soared 6.2% this month through Thursday, putting it on track for the biggest May gain since 1990. The blistering rally, propelled by a reprieve from President Donald Trump's tariff offensive, has left the benchmark within 4% of its February record. 'Traders have become too desensitized to the tariff shock-and-awe strategy by Trump,' said Jeffrey Hirsch, editor of the Stock Trader's Almanac, who correctly forecast the recovery after the 2008 global financial crisis. 'After this massive rally, stocks will likely hit a bumpy stretch in the coming weeks on risks that this administration may try to implement more dramatic trade policies.' Pricey valuations, muted demand for hedges and stretched investor positioning have left stocks vulnerable to a pullback, according to Hirsch. That may lead to weaker returns in June. The S&P 500 has risen just 0.2% on average in June over the past three decades, compared with a 0.8% move in the other 11 months of the year, according to data compiled by Bloomberg. Fault lines are already forming after a Thursday rally mostly stalled out as solid results from Nvidia Corp. were overshadowed by uncertainties on Trump's levies. Tests Ahead The first test of the market's resolve will be the Fed's interest-rate decision on June 18. Two days later comes 'triple witching' — when a large swath of equity-tied options expire, amplifying volatility — and the end of the month brings quarterly portfolio rebalancing. Those are the critical milestones that will determine if bulls can keep driving stocks higher with the S&P 500 edging toward 6,000, a key psychological threshold. History doesn't bode well for stocks in the months ahead. In post-US presidential election years over the past seven decades, the S&P 500 has typically struggled in early June as investors book profits heading into the summer months, which is particularly the case if stocks get a strong boost in May, like this year, according to Hirsch. 'Sell in May' The adage 'sell in May and go away' alludes to a six-month stretch ending in October that historically has been the worst time to own stocks. Since the early 1970s, the S&P 500 has had a mediocre stretch from Memorial Day through Labor Day, averaging a gain of just 1.8%, Hirsch says. Still, in recent memory, the S&P 500 has suffered losses in June just once in the past decade, data compiled by Bloomberg show. This time though, fund managers have reduced cash holdings and invested heavily in US stocks in recent weeks. That bullish tilt raises questions over who's left to buy after fund managers piled into stocks at a furious pace in May. Commodity trading advisers, or CTAs, which typically buy stocks as index prices rise and sell when they decline, turned net long on equities last week for the first time since early March after the S&P 500 broke above 5,800, according to UBS Group AG. But CTAs will be only moderate buyers in the coming weeks if the S&P 500 doesn't top 6,000 soon, says Maxwell Grinacoff, an equity derivatives strategist at the bank. 'CTA positioning remains skewed to the downside,' Grinacoff said by phone. 'If the market rally unwinds soon, those trend followers will be forced to turn net short on stocks. That would inevitably push shares lower from here.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
30-04-2025
- Business
- CNBC
Victoria Greene: Hard to know if GDP contraction is really a trend or just a data point
Victoria Greene, G-Squared Private Wealth CIO; Keith Fitz-Gerald, Fitz-Gerald Group principal; and Jeff Hirsch, Stock Trader's Almanac editor-in-chief, join CNBC's 'Power Lunch' to discuss market outlooks.
CNBC
30-04-2025
- Business
- CNBC
Jeff Hirsch: Markets under Trump are tracking 'old-school Republican years,' warrants caution
Jeff Hirsch, Stock Trader's Almanac editor-in-chief, joins CNBC's 'Power Lunch' to reflect on the first 100 days of President Trump's second term.
CNBC
30-04-2025
- Business
- CNBC
Sell in May? Don't get taken in by seasonal trading patterns
It's a tough time if you believe in following historical seasonal indicators for the stock market. Since 1950, April is the second best month for the S & P 500 (up an average 1.5%), and the best month for the Dow Industrials (up an average 1.8%), according to the Stock Trader's Almanac . That hasn't happened this year. With one day left in the month, the S & P 500 is down about 1% in April, the Dow Industrials off by 3.5%. Other seasonal barometers have not been particularly bullish. January was up, an historically optimistic sign, but February and March were down months, as was the first quarter. And one of the most popular seasonal indicators -- the Best Six Months, which runs from November through the end of April — is also negative. The S & P 500 is 2.5% below its close at the end of October of last year. What gives? And should you trade on seasonal indicators? Best six months wraps up It really is rather startling when you look at the returns. There is a lot of noise and randomness in stock trading patterns, and it is often very difficult to find a signal in the noise. But there is a noticeable, roughly 6% difference in the average yearly returns between investing in the Dow Industrials from November through April vs. May through October. Best/worst six months for Dow Industrials (1950-present) November 1-April 30: up 7.4% May 1-Oct. 31: up 0.8% Source: Stock Trader's Almanac Using the same timeline for the S & P 500, Carson Group chief market strategist Ryan Detrick notes November-April are the strongest six months for that benchmark too. Best/worst six months for S & P 500 (1950-present) November 1-April 30: up 7.1% May 1-Oct. 31: up 1.8% Source: Ryan Detrick, Carson Group What accounts for the Best Six Months effect? Why does this happen? Why does the market tend to be higher from November through April? Here's an interesting hint: it's not just in the U.S. The pattern is global. One academic study found that th e pattern was true in 36 of the 37 developed and emerging markets studied, and was particularly strong in Europe. But why? The same authors examined several possible explanations, but concluded "none of these appears to explain the puzzle convincingly." Another study thought it was a product of an "optimism cycle," where investors simply look ahead at the end of the year to the new year with overly optimistic expectations, but that optimism becomes hard to sustain as the new year progresses. A more intriguing explanation comes from a study that looked at the effect of shorter days on investor behavior. In "Winter Blues: A Sad Stock Market Cycle," several academics proposed that this phenomenon was due to the role of seasonal affective disorder (SAD). What does SAD have to do with stock returns? The authors contend that stock returns are related to the amount of daylight and that shorter days cause many to become more risk averse. This risk aversion causes investors to do less, which (by implication) leads to less speculative trading and fewer chances to make mistakes. When the Best Six Months breaks down Given what looks like a strong seasonal pattern, what happens when the Best Six Month pattern breaks down, as it has this year (both the Dow and the S & P are down in the November-April period). Stock market historians noted that in periods when the Best Six Months have been negative, the market has usually struggled. "When the market does not rally during the bullish season other forces are more powerful and when that season ends those forces may really have their say," Jeffrey Hirsch, editor of the Stock Trader's Almanac, said in a recent note to subscribers. Hirsch noted that there have been 16 years since 1950 where the Dow Industrials have been negative in the November-April period (most recently in 2020 and 2022), and that bear markets had ensued or continued in 14 of those 16 years. "Only in 2009 and 2020 were the bear markets already over," Hirsch said. Should anyone trade on seasonals? Whatever the reason, and whatever the historical pattern, the main issue is, should anyone trade on this? The answer is likely no. One reason is the whole catchphrase, "Sell in May, and Go Away" may be a bit overrated. Detrick points out that May has been up in nine of the past 10 years. Maybe we should switch to "sell in June?" The June to November six-month period has also produced sub-par 2.7% returns since 1950, Detrick notes. The lesson here: go ahead and knock yourself out if you want to trade seasonal patterns, but you're probably not going to outperform in the long run. After 35 years of covering markets, here's what I believe: buy and hold beats market timing of any kind. Have a plan, understand how much risk you can afford to take and still be able to sleep at night, and stick to the plan. One simple reason I am not a proponent of market timing of any kind is that the biggest gains in the market occur on only a handful of days each year, and no one knows on which days they will occur. In my book, " Shut Up and Keep Talking: Lessons on Life and Investing From the Floor of the New York Stock Exchange ," I show a simple study by Dimensional Funds that charts the growth of $1,000 invested in the S & P 500 in 1970 through 2019. Hypothetical growth of $1,000 invested in the S & P 500 in 1970 (through August 2019) Total return $138,908 Minus the best 5 days $90,171 Minus the best 15 days $52,246 Minus the best 25 days $32,763 Source: Dimensional Funds These are startling numbers. Taking out the best five days in those 50 years, and your return would be 35% lower, and even less if you were not in the market on the best 15 and 25 days. And remember: you have no idea when those best days will come. If that reasoning doesn't impress you, ask yourself this: what would you do with the money if you pulled it out at the end of April? Put it in Treasury bills? That would be a losing proposition, Larry Swedroe, former head of financial and economic research at Buckingham Strategic Wealth, tells me. Swedroe agrees that the S & P's returns were inferior in the May through October period but that even those inferior returns outperformed Treasury bills on average. The bottom line, Swedroe says: investors are "clearly better off staying invested without even considering taxes."
Yahoo
30-04-2025
- Business
- Yahoo
Old Wisdom of ‘Sell in May' Back in Focus as Stock Market Churns
(Bloomberg) -- An age-old market maxim looms over the bounce in US stocks: Sell in May and go away. New York City Transit System Chips Away at Subway Fare Evasion NYC's Congestion Toll Raised $159 Million in the First Quarter The Last Thing US Transit Agencies Should Do Now At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History At the National Public Housing Museum, an Embattled Idea Finds a Home One of the best-known market trends, the 'sell in May' effect is backed by decades of historical performance: Investing in a fund that debuted in 1993 and tracks the S&P 500 during the May-October period yielded a cumulative return of 171%, compared to a 731% gain for November-April, an analysis from Bespoke Investment Group found. The pattern last held from November 2023 to October 2024. Seasonality is among a multitude of factors investors are crunching to get a read on how stocks might behave in coming weeks, even as their faith in many once-reliable indicators has been shaken by the unpredictability of President Donald Trump's tariff policies. Taken alone, the old adage would argue against hopping on a searing rebound that has seen the S&P 500 recover 12% from its lows of the month. The index is still down 5.5% year-to-date. 'The scales are tipped in favor of the 'May-Sellers' this year,' said Tyler Richey, co-editor at Sevens Report Research, adding that the risks are skewed toward the S&P 500 suffering another big decline next month. Meanwhile, a longer-term view illustrates the 'sell in May' concept even more starkly: Investing in the S&P 500 in the May-October span over the last 74 years has garnered a cumulative return of just 35%, compared with an 11,657% gain during the other half of the year, an analysis from the Stock Trader's Almanac showed. The bounce in stocks will run a gauntlet of earnings reports and market data this week, culminating in Friday's US employment report. Some indicators have been flashing buy signs, including a plunge in investor sentiment earlier this month and the S&P 500's close above the 5,500 level. That marks a 50% retracement of the index's peak-to-trough decline, which some chart-watchers say indicates that investors are back to buying the dip. Tough start Seasonality paints a more cautious picture. While the pattern isn't written in stone, the comparatively poor May-October performance of the S&P 500 has been more pronounced during years when stocks got off to a weak start. A fund tracking the S&P 500 averaged a decline of 0.4% in May-October during years when it started with negative returns through April, the Bespoke's data showed. The fund — SPDR S&P 500 ETF Trust — is down 5.4% this year through Tuesday. Richey also noted that the seasonal pattern is especially relevant in years when market volatility is elevated going into May. Though the Cboe Volatility Index has eased from multiyear highs hit earlier this month, it is still hovering around 25, compared to its long-term average of about 20. One potential source of volatility could come around mid-year, as Trump's pause on tariffs applied to nearly all US trading partners outside of China is set to expire in July. While such an outcome could bolster the track record of the 'sell in May' trend, it would also offer further proof of how the twists of the global trade wars are likely the key driver for market moves. 'We are now in a tariff world. We are more held hostage to Washington and the tariff discussions than any seasonal trend,' said Jay Woods, chief global strategist at Freedom Capital Markets. At the same time, most market observers would argue that the average investor is better off staying the course for the long haul than trying to time market moves. Bespoke's analysis found that simply buying and holding the SPDR S&P 500 ETF Trust since 1993 would have yielded a 2,100% return. Made-in-USA Wheelbarrows Promoted by Trump Are Now Made in China As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet ©2025 Bloomberg L.P. Sign in to access your portfolio
