weekly market update 4/19/2024

Geopolitics and continued digestion of last week’s hot inflation data weighed on markets, and the S&P 500 experienced its first six-day losing streak since October 2022.  We did observe some potential green shoots, however, as the rise in interest rates that has pressured markets in April slowed and oil prices finished the week lower despite a very tense situation in the Middle East.  Investors were reluctant to buy market weakness after last weekend’s Iranian drone and missile strike on Israel, but Israel’s response on Thursday night appears to have been limited and so far, it seems neither side wants to escalate tensions further.

As a result, while the S&P 500 stumbled into the weekend, dragged in large part by technology stocks and weakness from the vaunted AI trade, some areas such as financials and consumer staples were notably strong, and the Dow Jones Industrial Average closed Friday up over 200 points on the day.  Ultimately, however, we expect more choppy trading next week ahead of Friday’s important inflation report, the personal consumption expenditures, or PCE, and high-profile earnings releases from Alphabet, Meta, and Microsoft.

IS SELL IN MAY DEAD?

A once popular market strategy to sell in May and buy back into stocks in October has increasingly come under scrutiny.  Recently, Renaissance Macro published a chart (see below) that shows the seasonal path of the S&P 500 from 1928 through 2024 and certainly, it does not appear as though investors have been rewarded by avoiding stocks until October.

Ian G. Browning, CFA
Managing Director, Investment Strategies | Shareholder

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