So much for sell in May so far. The S&P 500 Index was up 2.35% in May and is up 4.97% for the first five months of this year. The one major S&P Index that is down on the year is the S&P Small Cap 600 Index which is down 1.43%. The best performing sector YTD through May is the utility sector which is up 13.57%; however, this sector was down 1.05% in May.
A number of economic variables were released last week and one article link in the magazine provides commentary on them. Of some significance was the fact annualized first quarter GDP was revised to a minus 1%. Pundits are attributing the weak GDP reading to the winter weather experienced during the first quarter. As Econoday notes, "Overall, while overall growth was bumped down into negative territory, it was mainly due to less robust inventory growth—final demand was little changed. And the second quarter is gaining strength."
A number of key economic data points will be reported this week. All eyes will be on Mario Draghi, President of the European Central Bank. Last month Draghi announced the ECB was ready to counter low inflation and to assist economic growth. It is anticipated the ECB will cut interest rates and deploy other stimulative measures when they meet on June 5th. One potentially controversial measure the ECB may announce is reducing the central bank deposit rate to minus .1% or minus .15%. Essentially this charges banks that have funds on deposit at the ECB.
Below is the link to this week's magazine.