Let’s look at “Sell in May and Go Away.”
The Dow and S&P 500 indices are in the green for the year — only marginally — at 0.4%.
The adage of selling generally — not just this year — takes into account that most of the growth in the economy has already been baked in for the year. Since equities generally look 6 months into the future, your May pricing may be the 52-week high.
I believe this year will be the year that the May selling wisdom will be very lucrative.
There is nothing on the 6-month horizon that will move stocks higher — with the possible exception of more QE coming in July. I kid you not.
This “June on the table” for a rate rise, is nonsense. The Atlanta Fed just lowered Q2 GDP to 2.5% annualized, which means 0.6% for the quarter, but that number is elevated over the latest bloated retail sales, which must be revised down based on quarterly earnings reports of retailers across the board.
We get second revision on Q1 GDP this week. It currently stands at 0.5% annualized, which comes in at an anemic 0.125%.
A lower second look at Q1 GDP will take stocks higher this week as the June talk dissipates. I would suggest this Friday as being a good time to pare your stock portfolio.
Take the run up on weak growth and then park your funds until after the election and weak holiday sales.
On Friday, for the record, I will list the three equity indices levels, so we can revisit this in 6 months.