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May Market Update: Back To Square One

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May Market Update: Back To Square One
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Signposts

by Yimin Xu

  • SPY Flat YTD: After a wild recovery, SPY is back to even for the year—but skepticism remains high.
  • Inverse TGIF: Weekend policy swings from the White House have investors anxious about uncertainty.
  • Valuation Back in Focus: As SPY nears historical highs again, investors revisit expensive valuation multiples.
  • Earnings Growth Could Be Underestimated: Market analysts might be underestimating SPY earnings potential after a stronger-than-expected Q1.
  • SPY Technical Analysis, Seasonality: SPY sits at a critical technical juncture with bearish and bullish scenarios equally plausible.
  • Inflation Moves Towards Fed Target: Inflation data moves closer to the Fed’s 2% goal, but Powell remains cautious on rate cuts.
  • Yields and TLT Technicals: Higher term premiums are driving long-term yields higher, suggesting more downside risk for TLT.
  • USO - Bearish Path Ahead: Oil prices likely face further downside pressure due to increased global supply and softer demand.
  • Has Gold Topped?: Gold inflows reverse, raising questions about whether the recent rally has peaked.
  • Bitcoin Back To All-Time-High: Bitcoin continues benefiting from institutional inflows, but short-term headwinds could slow the rally temporarily.