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Market Insight - Sell in May and Go Away?

• Second Daily advance in the US shares! • Much Awaited Federal Rate decision today and US Non-Farm Payrolls (NFP) due on Friday.

Market Insight – May 04th, 2022.

  • Second Daily advance in the US shares!
  • Much Awaited Federal Rate decision today and US Non-Farm Payrolls (NFP) due on Friday.

S&P500

S&P 500 rallied for the second day in a row ahead of today’s FOMC meeting where the Fed is expected to hike interest rate by another 50 basis points (bps). This allowed to somewhat slow down the selloff that got triggered on the 21st of April. And the Equities markets along with the FX markets are today in an apparent pause. Due to uncertainties around the announcement. The inflation in the US is currently at 40- a year high some policymakers are saying a hike of 75bps could be necessary to tame the runaway inflation.

S&P has dropped by more than 13% between January and April in 2022. There is a saying in the markets that goes like ‘Sell in May and Go Away'. But it seems this year the fear-based selloff may have already happened. Also, there are mounting recession worries due to all the pandemic and geopolitical related risks emerging all around us. 

As highlighted in our last analysis the economic growth engine is slowing down and investors need to take a more realistic stand, later we witnessed the massive selloff in the equities markets around the globe as investors tune-up with the internals of the equity markets. Despite the risks to the economic growth and massive geopolitical risks in the shape of the Ukraine-Russia war, investors look still optimistic for markets and think the stocks could finish higher by the end of the year. It appears that investors will aggressively jump to buy on this dip, while the market seems to be consolidating after the selloff and awaits the Federal Rate decision today and US NFP data on Friday this week.

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The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

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Vishal, R.

May 4, 2022

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