US stock market has experienced one of the best first four-month performance over the last four decades, produced 17.5% price return comparing to 19.1% in 1987. It is the third best price return for S&P 500 index since 1950; the top four-month performance belongs to 27.3% in 1975 as the stock market recovered from a severe bear market in 1973-1974 when the index nosedived more than 42% in two years. With calendar flipped into May and onto summer season of sun, beaches, most likely we would hear a lot of about old Wall Street saying “Say in May and go away” in the media. Moreover, primarily because of the unprecedented nature of speed and magnitude of the current market rally against the backdrop of weakening macroeconomic and corporate earnings backdrops during the period. Sell in May and Go Way has delivered 6 times more return Historically, the six months between Nov-April frequently experienced extraordinary stock market performance than the six months between May to Oct as
There have been nine 25 bps rate hikes since the Fed tried to normalize short term interest rates, or Fed Funds rates, from Dec 17, 2015, the first hike to the latest of round on December 22, 2018. The short term borrowing rate rose from almost zero percent to the target of 2.25-2.5% as of now, and short term bond yields also climbed along with overnight rates. The benchmark yield of 2 year Treasury bond was near 1% when Fed made the first 0.25% rate increase on December 17, 2015, and it rose nearly 140% to about 2.39% as this note generated. However, the long bond or the yield on 30yr US Treasuries is traded at roughly 2.95%, almost the exactly where it was 3 ¼ years ago. The table below looks at the bond yield changes from the date that the Fed made the 1st hike to today. Also visually, the central bank’s gradual rate hike policy since 2015 has pushed yields on short (2 year) and intermediate term note (5 year) steadily marched higher and while 30 year bond yield fluctuated a