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Weekly Market Newsletter

Weekly Market Newsletter

May 29, 2019

China Trade continues to dominate the current market psychology as developing news and tweets in this area seem to drive intraday market direction. Washington seems to be playing hardball with China. “We’re not ready to make a deal. We’re taking in tens of billions of dollars in tariffs, and that number could go up very, very substantially, very easily” Trump told a news conference, flanked by Japanese Prime Minister Shinzo Abe (South China Morning Post)

All major averages are hovering at or slightly above their respective long term trend lines. May has turned out to be a weak month as the market seems to be waiting on a China Trade deal. The old adage, “Sell in May and Go Away” seemed to certainly apply this May.

Having said that, the table below shows the top 20 first four month gains for the S&P 500 with the subsequent changes for May, June, Rest of Year, Worst 6 months May-Oct, 2nd half July-Dec and full year performance. The data shows that although most of the gains are logged in the first 4 months, there is still upside to be had in the latter part of the year.

May is weakest and May 2019 has delivered market declines so far, down -4.9% for the S&P 500 as of yesterday’s close. However, after big starts, 7 of the 9 subsequent May declines were followed by big gains in June (highlighted in green). So, while we do not anticipate much upside over the next 5 months or so, June is set up for a boon.

If you recall back in December, the Fed reversed course and stopped raising interest rates. Take a look at what happened to the 10 year Treasury Yield.

And finally, Let’s take a look at projected College costs moving forward. If you have kids planning on attending college, start saving now!

On a personal note, Shannon graduated with her MBA from Rollins and will be working for Central Square Technologies.

Evan graduated with his Finance Degree from Florida Atlantic University and will start working for Northwestern Mutual.

Exciting times for my kids and I couldn’t be more proud of them as they start a new chapter in their lives.

Dow Jones Industrial Average Index

Nasdaq Composite Index

S&P 500 Index