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By Bill Hornbarger, Chief Investment Officer

Three Things to Watch

  • The Institute for Supply Management (ISM) manufacturing survey will be released Monday morning. The consensus estimate is for an overall reading of 65, which would be the highest since the early 1980s. The prices paid component is also expected to be strong (consensus estimate 86.1), which would further fan inflation concerns.
  • Other key reports include factory orders (Tuesday), ISM services index (Wednesday) and the April employment report, which will be released on Friday. Non-farm payrolls are expected to be up a strong 978,000 and the unemployment rate is expected to decline to 5.7%.
  • There are multiple Fed speaking appearances with Fed Chairman Jerome Powell speaking Monday afternoon, Dallas Fed President Rob Kaplan Tuesday and Thursday and New York Fed President John Williams and Cleveland Fed President Loretta Mester also will speak. The market will pay close attention after last week’s FOMC meeting to any hints on tapering in light of the expected uptick in the rate of inflation.

Three Things to Know

  • The first-quarter earnings season so far has seen a record 87% of S&P 500 companies top estimates and earnings growth on average of 46%. (Source: Seeking Alpha)
  • “Sell in May and go away” is an investment strategy based on the theory that the stock market underperforms in the six-month period between May and October. Since 1945, the S&P 500 index has gained a cumulative six-month average of 6.7% in the period between November to April compared to an average gain of around 2% between May and October. The original saying was actually “Sell in May and go away, and come on back on St. Leger’s Day”, referring to the custom of aristocrats, merchants, and bankers to leave London and escape to the country during the summer months. (Source: Investopedia, The Corporate Finance Institute)
  • This weekend featured the 147th Running of the Roses (The Kentucky Derby), the oldest continuously held sporting event in American history. Meriwether Lewis Clark Jr. started the Kentucky Derby. His grandfather was William Clark of the famed exploring duo Lewis and Clark. (Source: NBC New York)


The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.