The old adage is to sell in May and buy back in November. Whether this adage holds up is another story. But, with the Fed and the ECB showing the limits of monetary stimulus, markets have stopped their upward path. I think there are good fundamental reasons behind this given the lower earnings growth we have seen. Early this year, I said that Europe would outperform purely because of valuation and if you look at the Dax vs. The S&P, that is certainly the case so far. I continue to believe that US share prices are based on a benign if not an optimistic view of the macro environment. If we see anything less, I believe US shares will be the ones to pull back most.
Jobs data tomorrow: expecting a +250K print. The market will be disappointed with less.
As I am on a mini holiday, that’s it. Here are the links.