Sell in May and go away? By Blackfort CIO Dr. Andreas Bickel

 

Sell in May and go away?

The jury is still out. After having reached, a new all-time high the S&P 500 is selling off. The catalyst was that Mr. Trump’s imposed higher tariffs. From a technical standpoint, the damage is (so far) little. A retracement to the 200-day average is in the cards and so far there is still the chance that we see a golden cross (i.e., 100 day crosses 200-day average). Nevertheless, forward-looking indicators are worsening. Central banks have little room for further stimulus. New Zealand has cut its policy rate. The Fed has cut one of its policy rates by 5 bps indicating a more dovish stance. But others have no dry powder. The new tariffs are subtracting around 0.5% of the Chinese GDP, but do not forget the US will as well be hurt. Mr. Trump wants to be reelected. Therefore, he needs a strong economy and a positive stock market. His latest action is (at least for the short-term) doing the opposite. The future will show if his negotiation tactics will work out or not…

 

 

Source: https://www.linkedin.com/feed/update/urn:li:activity:6533720633753255936

Published: 13.05.2019 by Blackfort CIO Dr. Andreas Bickel

 

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