Index Performance – week ending 5/1/2020:

S&P 500:  -.21%
Dow Jones Industrial Average:  -.22%
Nasdaq Composite:  -.34%

Equities

US equities were little changed this week, as poor economic data continued to roll in and overall better than expected earnings from technology bellwethers failed to fuel further gains. The S&P 500 Index closed out April with a 12.7% gain, its best month since January 1987 and the largest increase for April since 1938.

“April was a historic rally for stocks, but the worries continue to add up,” explained LPL Financial Senior Market Strategist

It is a foregone conclusion that the US economy has entered recession, led by the consumer, which accounts for more than two-thirds of the US economy based on gross domestic product (GDP). The collapse of consumer spending was evident in March personal consumption expenditures data released on Wednesday that showed a record 7.5% month-over-month drop in consumer outlays. It would have been worse if we weren’t stocking our refrigerators and pantries.

The manufacturing sector is also contracting sharply, not surprisingly given the business shutdowns that began in March. Investors had a glimpse of the extent of the hit to manu

The Federal Reserve (Fed), the European Central Bank (ECB), and the Bank of Japan (BOJ) all met in the last week and while the show of power was minimal compared to recent weeks, they collectively reasserted their resolve to do whatever is necessary to support the global economy through the COVID-19 economic crisis. Rates are being held about as low as they can go, significant new programs to enhance market liquidity and support lending are in place, and, as shown in the LPL Chart of the Day, asset purchases have accelerated. In fact, with April not yet completed, central bank assets have risen over $3 trillion, the biggest two-month jump on

One of the best known investment axioms is to “sell in May and go away.” This is largely because these six months have historically been some of the worst six months of the year. As you can see below, the next six months have tended to be on the weak side.

As shown in the LPL Chart of the Day, the next six months have indeed been the worst six months of the year, up only 1.5% on average. To add injury to insult, we are leaving the six most bullish months of the year.

“Stocks are up more than 30% from the March lows, suggesting a well-deserved pullback during these trouble