More new highs. The S&P 500 Index closed at a new all-time high for the third consecutive day, capping its best April since 2009. This is the first year since 2013 that each of the first four months of the year have been higher. So far, the S&P 500 is up 17.5% for the year, the best four-month start since 1987. Shippers, semiconductors, and financials were the leading groups for the month, while biotech and gold miners lagged.
Sell in May? It is officially the month of May, and with that, we’re starting to hear the annual “Sell in May” calls. This is because the worst six months of the year has been from May until October, up only 1.5% on average for the S&P 500. With the S&P 500 up 25% from the December lows, we do think the odds favor more of a consolidation, or even modest correction, during this historically troublesome time of the year. On the LPL Research blog later today, we’ll take a closer look at the history of “Sell in May”.
Fed day. Federal Reserve (Fed) policymakers are concluding their latest meeting with a policy announcement later today. Markets are overwhelmingly predicting unchanged rates for this meeting, consistent with the Fed’s messaging of a pause in rate hikes. Even though no changes to headline policy are expected, Fed Chair Jerome Powell could provide important context on economic conditions and inflation in his post-meeting comments.
Job creation highest in nine months. Today’s Automatic Data Processing (ADP) payroll report hinted that April labor market activity was strong. ADP data showed payrolls rose 275K, the biggest increase since July 2018 and above consensus estimates for a 180K gain. We’ll get more details on the state of the U.S. labor market in Friday’s April jobs report.
More encouraging signs. Data continue to show a resurgence in U.S. consumer health after lackluster activity over the past few months. The Conference Board’s Consumer Confidence Index climbed to 129.2 in April, bouncing back from a 16-month low reached in January. Consumer sentiment and spending both took a noticeable hit last quarter amid a record government shutdown and an influx of negative global headlines, but improving fundamentals point to stronger activity ahead.
- Markit US Manufacturing PMI (Apr)
- ISM Manufacturing PMI (Apr.)
- Federal Reserve Rate Decision (May)
- Caixin China Manufacturing PMI (Apr)
- ADP Employment Report (Apr.)
- Durable Goods Orders (Mar)
- Markit/BME Germany Manufacturing PMI (Apr)
- Markit Eurozone Manufacturing PMI (Apr)
- Initial Jobless Claims (Apr. 27)
- Unemployment Rate (Apr)
- Markit US Services PMI (Apr)
- Markit US Composite PMI (Apr)
- ISM Non-Manufacturing Index (Apr)
- Eurozone PPI Report (Mar)
- Eurozone CPI Report (Preliminary, Apr)
- Nonfarm Payrolls Report (Apr.)
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Index data obtained via FactSet
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