Sometimes, it’s better simply to tune out all the noise.
If ever there was a year to follow the famous market adage “sell in May and go away” it was surely this one. With US President Donald Trump ratcheting uncertainty up to 11, with a genuine trade war raging, and with bond markets in turmoil, it seemed like a pretty good moment to hunker down.
JPMorgan’s Jamie Dimon says bond markets will crack at some stage, under the weight of too much US government spending. David Rowe
But investors who’ve done nothing this year have suffered little pain, as April’s market correction was followed by a rally for the ages. The S&P 500 rose 6.2 per cent to record its best monthly performance since November 2023 and its best May since 1990.
This leaves an obvious question: what comes next?
Bank of America strategist Michael Hartnett reckons it’s going to be big, whatever happens. He’s predicting either a big breakout as markets push higher – a full 80 per cent of market indices around the world are trading above their 50-day and 200-day moving averages, indicating just how much bullish momentum is out there – or a big breakdown as the rally goes into reverse.
