To The Moon

• The S&P 500 $SPDR S&P 500 ETF Trust(SPY)$ $iShares Core S&P 500 ETF(IVV)$ $Vanguard S&P 500 ETF(VOO)$ and Nasdaq-100 $Invesco QQQ(QQQ)$ returned -0.49% and -1.43% respectively last week.

• Technology stocks experienced a minor correction, which caused the tech-heavy Nasdaq-100 to fall more than the S&P 500.

• Important economic data to watch this week includes the ISM Manufacturing PMI on Monday, JOLTS on Tuesday, ADP Non-Farm Employment Change on Wednesday, and Non-Farm Payroll on Friday.

We remain optimistic this week due to the following reasons:

1) Historical Performance of S&P 500:

• When the S&P 500 returns more than 10% between January and May, it generally continues to perform positively for the remainder of the year.

• Since 1950, there have been 21 occasions where the S&P 500's January to May performance exceeded 10%.

• In 90.48% of these instances (19 out of 21), the June to December period provided an average positive return of 11.89%, with a median return of 13.64%.

• In the first 5 months of 2024, the S&P 500 returned 11.3%.

2) Underinvestment by Investors:

• Investors may still be underinvested as measured by FINRA Margin Debt.

• FINRA Margin Debt, which measures the amount of money investors borrow from their brokers via margin accounts, currently stands at $775 billion. This is 17% lower than its all-time high of $935 billion in October 2021.

   

Source: MacroMicro

3) Favorable Inflation and GDP Data:

• The latest inflation and GDP data support a more dovish rate cut narrative.

• The Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation measure, remained flat in April as expected.

• The US economy grew at a slower annual rate of 1.3% in Q1, down from the initially expected 1.6%.

Source: YahooFinance