/Sell in May and Go Away?

Sell in May and Go Away?

Tuesday, May 29, 2018 – As we approach the end of May, recent market moves and some historical perspective are important, but the traditional rhyme “sell in May and go away” might prove unsatisfying to some investors. While the S&P 500 is up over 3% for this month, the small-cap Russell 2000 Index has lagged, reversing a recent stretch of outperformance. Energy shares performed worst within the S&P 500 Index, while Utilities recorded solid gains as longer-term bond yields fell, making their relatively high dividend yields more attractive.

In general, the U.S. markets edged slightly higher last week, driven by several key factors. Trade negotiations with China prompted swings between optimism and pessimism, while ongoing diplomatic tensions with North Korea weighed heavily on the market’s mood. The Fed’s decision on interest rates was also in focus, signaling that the path of gradually rising rates remains intact. Of particular note are the prospects of inflation temporarily running slightly above their long-term 2% target, providing some comfort to investors. Meanwhile, corporate earnings are rising at a strong pace. While prevalent risks are likely to drive further volatility, the combination of a healthy consumer and healthier bottom lines for businesses provide support for the market.
The week was perhaps most notable for the nosedive in oil prices and energy shares. On Monday, oil prices reached their highest level since late 2014 – mostly due to the speculation that the U.S. would impose new sanctions on Venezuela after the country’s leadership congealed its control in allegedly corrupt elections. Ironically, the threat of U.S. sanctions appeared to be partly at work in this case as well, with some speculating that OPEC was seeking to compensate for the loss of Iranian and Venezuelan supply.
These key market highlights were reflected our ETF Global dynamic and prospective Quant Rankings. The week’s winners include both iShares U.S. Energy ETF (IYE) and iShares Global Energy ETF (IXC) both gaining approximately 15% in their respective total Quant Score. The biggest drop in ETFG Quant ratings were SPDR Portfolio Emerging Markets (SPEM) and iShares Currency Hedged MSCI South Korea ETF (HEWY). Looking ahead, economic data in the coming week will be plentiful, with May’s jobs report and construction spending all being reported on Friday. For those investors looking for a real winner for their portfolio, with a total Quant Score of 82.42 the WisdomTree U.S. MidCap Dividend Fund (DON) is expected have the most potential in capturing positive market movements.
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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.
ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.
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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

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