Sell in May
May has not been a positive month for equity investors historically, and investors are quite familiar with the advice to “sell in May and go away.” Having said that, the first half of May has been positive for broader equity markets this year. The NASDAQ tracking PowerShares QQQ ETF (QQQ) has gained 4.3% this month. The S&P 500 (SPY) and the Dow Jones Industrial Average (DIA) are also in the positive zone for the month. Steel stocks like U.S. Steel (X) and AK Steel (AKS) have also seen some traction after the Section 232 exemptions spooked investors earlier in the month.
May has been a happening month so far for markets. Earlier this month, the United States and China held talks in Beijing amid the trade frictions between the world’s two biggest economies. Furthermore, the United States has pulled out from the Iran Nuclear deal. Although the move was largely expected, it led to a spike in energy prices.
More recently, as conditions seemed to stabilize in the Korean Peninsula after the historic meeting between the leaders of South and North Korea last month, North Korea has now reportedly threatened to call off the proposed summit with President Trump.
While the first half of May has seen considerable action, the second half of the month looks equally interesting. In this series, we’ll look at some of the developments that equity investors should watch in the second half of the month. While investors could still want to sell in May, these developments could mean that markets will continue to be interesting this month.