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The year has been a positive one thus far for investors as the global market has grown remarkably.
For the United States stock market, April turned out very well per gains across the major indices. In anticipation of another historic month, stock futures are showing a positive uptick ahead of the market opening on Monday, May 3 which doubles as the first trading day of the month.
While the futures on the S&P 500 (INDEXSP: .INX) soared 0.45%, the Dow Jones Industrial Average (INDEXDJX: .DJI) futures gained 125 points. In a complementary move, the futures on the Nasdaq 100 gained recorded a 0.33% uptick. The positive growth in stock futures across the board is a testament to how bullish investors are for the new month amid continuous economic recovery efforts.
The increase in stock futures comes despite a market-wide slip in stock indices in general. The Dow dropped 185.51 points to 33,874.85. The S&P 500 recorded a 0.72% slide to 4,181.17, while the Nasdaq Composite (INDEXNASDAQ: .IXIC) dropped 0.85% to 13,962.68.
“Investors are gearing up for another busy earnings week capped off with a widely watched jobs report. Given the positive economic and earnings news, the path of least resistance appears higher,” said Jack Ablin, Chief Investment Officer at Cresset Capital.
The prospective growth expectations for the market will seek to top April’s performance in which the Nasdaq Composite surged 5.4%, the Dow Jones pumped 2.7% and the S&P 500 grew by 5%.
European markets are also on their heels as the market opens the first trading day for the month. The German DAX PERFORMANCE-INDEX (INDEXDB: DAX) is trading 0.87% up to 15,267.16, and the Italian FTSE MIB (INDEXBIT: FTSEMIB) is up 0.33% to 24,357.11. While the UK markets are closed for the May Day holidays, France’s CAC 40 Index (INDEXEURO: PX1) is up 0.63% to 6,308.68.
After Record Stock Futures Performance, Should Investors Sell-Off?
The year has been a positive one thus far for investors as the market has grown remarkably, despite the slow recovery from the economic effects of the COVID-19 pandemic. Now investors may be contemplating whether to sell off their positions or to hold.
As reported by MarketWatch, a team of strategists at UBS Group AG (SWX: UBSG) said investors may be willing to explore the old adage which says “sell in May and go away.” This is based on the premise that the 6 months period preceding October is usually bearish for the market, and many will not want to par off the gains accrued earlier in the year.
However, the strategists noted that since the global financial crises of 2008/2009, the stay-invested strategy has outrightly outperformed selling off. This they pointed out is due to the non-seasonal growth potentials of tech stocks which fills up the S&P 500.
“In the US, a stay-invested strategy has tended to outperform, particularly in recent years,” the strategists said. “Market composition, with the US market more tilted towards growth stocks, partly explains the outperformance.”
While investing may be a personal decision, Ryan Detrick, chief market strategist for LPL Financial revealed that “Stocks have actually been higher during these worst months of the year eight of the past ten years,” making 2021 more likely to trail the general uptrend.