At the end of last week, we did not get the lethargic market action that I expected. Rather, I was pleasantly surprised with some positive upward movement. Then this Monday and Tuesday the markets went back to sleep, despite some overall positive economic data, save automobile sales. I would point out that the Russell 2000 (RUT), small cap index, has been a leader of late, which is a bullish indicator.
Perhaps the reason for the market lethargy is that this Friday will be the release of the May jobs report. Wall Street expects 155,000 job additions versus 160,000 the prior month. Given the Verizon (VZ) strike, I am expecting that we could get a disappointing report. If that is indeed the case; a tightening by the FOMC would be considered more uncertain, i.e. less likely at its June meeting.
What you are going to hear in the next few days, is the old Wall Street adage, “Sell In May and Go Away.” I do not subscribe to that proverb, as I wrote in a MarketWatch article a few years ago. Rather, with the S&P 500 (SPX) not having made a new high in over a year, I see pent up purchasing power on the sidelines which when put to work, will send the SPX to a new all-time high.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long UWM & VZ — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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