Stocks hit a rough patch the last week of April, as the historic rally could be tiring. The news was heavy and the economic data continued to be very weak, but central banks are doing all they can to help weather the storm.
Central banks are all in
The LPL Research strategists discuss how the Federal Reserve (Fed), Bank of Japan, and European Central Bank (ECB) are doing all they can to help the crisis. Low rates are here to stay, and more unique ways to increase confidence and liquidity are likely. Interestingly, the Fed and ECB both pressured their governments to use fiscal policy to further help the global economy.
Sell in May
The worst six months are upon us, as May through October historically has been a rough time for stocks. In fact, they’ve been the worst six months of the year for the S&P 500 Index going back to 1950. The good news, though, is that this period has been higher seven of the past eight years. The strategists agree that after the huge rally in stocks, some type of weakness during this seasonally weak time may be likely.
Buffett sees no deals
Warren Buffett held his annual shareholders meetings over the weekend, and he gave his views on the state of the US economy, which was somewhat more dour than normal. He doesn’t see any good deals, and as a result, his company has a record $137 billion in cash. Also, he sold all of his airline holdings, as he thinks that industry has likely changed forever. Of course, longer term he doesn’t think one should ever bet against the United States, but near term things are quite murky.
Tune in now
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