Stocks Did Well For The Month of April 2011: What About May?
Equities had a good month of performance in April and many companies reported above earnings expectations. April was less tumultuous than March with stocks on average posting gains compared to the beginning of the Libyan crisis and Japanese earthquake and tsunami that occurred in the prior month. April ended on a good note (see our technical analysis note here) but what will May bring?
Global Tensions Leading to Summer
Global tensions could weigh on stocks from the issues still occurring in Japan that may slow growth to the intensifying problems in Libya and Syria. The Dow Jones, S&P and Nasdaq rallied despite global headline risk and the next phase of the market rally will depend upon how much world news impacts trader sentiment.
U.S. Economic Data In May Should Be Favorable
U.S. economic data continues to trend in positive directions, albeit at a slow pace than some would prefer, including Federal Reserve Chairman Ben Bernanke who noted recently that the recession disproportionately affected low income people and minorities. The Dow Jones Industrial Average rose more than 400 points from 12,400 levels to over 12,800 this month and President Obama disclosed in April he is willing to support lower corporate taxes. Can this momentum continue as the summer heats up? Spending news may surprise as more Americans become more comfortable about the economy. We expect economic data to continue to have an upside bias in May.