STOCK MARKET OUTLOOK: SELL IN MAY AND GO AWAY ” ANOMALY AT THE CONFLUENCE WITH THE CORONA VIRUS OF THE RECESSION, THE UNITED STATES-CHINA TRADE WAR AND THE VOLTAGE & GROWTH OF THE BALANCE SHEET OF THE FED
- “Sell in may and go away” anomaly highlights the abnormally poor performance of the stock market during the month of May and the summer months
- The Dow Jones, the price outlook appears to be threatened by under-estimated, corona virus the risk of recession, and revive in US-China trade war and the voltage
- Fed’s balance sheet growth, and other accommodative measures, combined with fiscal stimulus efforts against a stock market selling pressure
The The Dow Jones recorded a amazing 34% rise from its January 23 low to the April 30, close. When investors have returned their calendars to the new month, however, the Dow Jones and other forms of equity benchmarks, like the S&P 500 and the Nasdaq index, started to come under pressure. This brings the sale May, and go away ” anomaly in the foyer a text explaining the abnormally poor performance of the stock market, throughout May and the summer months.
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Sell in may and go away” that might look like a statistical phenomenon on the surface, and the contradiction of the effectiveness of the leader on the market of the hypotheses, but by taking deeper macroeconomic history, and based on the context or a major financial crisisreveals a fundamental catalyst or explain why the Dow Jones and the broader stock market have experienced lackluster returns for the month of May and the summer months.
DJI-PRICE-CHART – DOW JONES INDUSTRIAL AVERAGE SEASONAL RETURNS: SELL IN MAY AND GO AWAY”
For example, just looking at the last decade, Greece is on the point of or payment default on its debt in May 2010. Summer 2011 saw the ECB to stave off the euro area, the credit blowup, for the implementation of its bond-buying program to save Italy and Spain.
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The strengthening of Confidence in the trade
China reduced its GDP growth estimates to mid–In 2015, as it announced plans to restructure its economy for more sustainable growth. Similarly, the January effectanother season of stock market anomaly can be explained by the fundamental factors as well.
THE DOW JONES, THE PRICE OUTLOOK IS THREATENED BY THE FELINE CORONA VIRUS OF THE RECESSION, THE UNITED STATES-CHINA TRADE WAR
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On that note, and taking into account the current market conditions, such as the probably inevitable corona virus of the recession, or. reintroduced a trade war the voltage, the risk of another strong stock market of the sale of large weaving looms. In addition, the gut-wrenching collapse of a broker that will give payrolls and soaring unemployment, could cause the recent a stock market rallydriven in large part by the FOMC meeting on liquidity, to come crashing down towards the March lows.
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This is the review of the way in which under-estimated the impact of a the two figures, the unemployment rate could not a brutal reminder of the economic realitythe fuel of the return of risk aversion, and send the Dow Jones is a spiral back to the bottom. At the same time, as He speaks for the ratesglobal equities face fresh headwinds of rebirth in US-China trade war and uncertainty.
Also, while investors complacency builds as wellthe stock market seems more and more detached from most financial stocks are the record of the assessment over a period of 12 months before P/E basis. The Dow Jones, the price outlook is, accordingly, remains bearish. In turn, it seems quite possible that the sell in may and go away ” stock market anomaly could be realized once more this year.
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— Written by Rich DvorakAnalyst for the DailyFX.com
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