MW Why 'sell in May and go away' could be a bit premature for stocks, according to one chart
By Christine Idzelis
The S&P 500 was down in midday trading Wednesday
The U.S. stock market has kicked off May trading mostly lower, with the S&P 500 down in midday trading Wednesday after slumping in April.
In May, S&P 500 returns tend to "skew positive but it has not historically been a strong month for stocks," Adam Turnquist, chief technical strategist for LPL Financial, said in emailed comments Wednesday. "Since 1950, the index has generated an average May return of 0.2% and finished higher 61% of the time, making it the fifth worst month for returns."
"However, returns have been a little more constructive recently," said Turnquist. "Over the last 10 years, May returns have averaged 0.7%, with nine of the last 10 months posting positive results."
May historically marked the start of the S&P 500's "worst six-month stretch," according to Turnquist, who said that performance gives "some credence to the 'Sell in May and Go Away' adage."
Major U.S. equity indexes were trading mostly lower around midday Wednesday, as investors waited to hear from Federal Reserve Chair Jerome Powell later in the afternoon.
The S&P 500 SPX was trading down 0.4%, while the technology-heavy Nasdaq Composite COMP shed 0.6% and the Dow Jones Industrial Average DJIA gained 0.2%, according to FactSet data, at last check.
Stocks had sold off in April amid worries about sticky inflation and rising rates in the bond market. The Fed will announce its policy decision on interest rates at 2 p.m. Eastern time, with Powell scheduled to hold a press conference shortly after at 2:30 p.m.
-Christine Idzelis
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May 01, 2024 12:34 ET (16:34 GMT)
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