Key takeaways from the week
- Equity markets in the main finish higher for a second straight week, helped by a continued earnings season. Thus far, 59% of firms are beating revenue expectations and 82% of firms are beating earnings expectations;
- Government bond markets headed for a second weekly decline as jobless claims in the US beat consensus; raising the perceived likelihood of the FED raising interest rates later this year; and
- Oil heads for its third weekly gain seeing a 6.57% move upward.
Has so called Wall Street wisdom has given us the opportunity to make an easy return?
We're approaching one such piece of wisdom now, the infamous theory to "sell in May and go away". Other such market seasonal trends are "the Santa Rally", and "the January Effect".
Much is written on the evidence for and against these phenomena, but one thing is guaranteed – no one can tell you accurately what will happen. A strategy employed by a Wall Street trader (who wants the Summer off), is rarely going to be suitable for someone looking to save for retirement.
We have written much about the need for long term thinking in a volatile market, and taking such a short term position is simply a gamble. December and January do tend to be good months, and there are plenty of examples of May-September being a negative period, but there are plenty when it isn't. July, for example, tends to be the best month of year, which throws a spanner in the works.
There is a way to beat the system. Don't listen to it.
Stick to simple and sound investment principles. If you're wondering what they are, this is a good place to start.
|Equity Indices||Value||Weekly Change|
|Shanghai Composite Index||2959.24||-3.86%|
|US 10 yr||1.88%||13.30%|
|UK 10 yr||1.60%||11.88%|
|Commodities / Energy||Price||Weekly Change|
|Brent Crude Oil||$45.53||6.57%|
|Currencies Majors||Value||Weekly Change|
|Bank of England||0.50%|
|Bank of Japan||-0.10%|