While “Sell in May and Go Away” has proven to be largely a folk tale when it comes to the market’s overall returns, there is some truth to the adage.
Namely, summertime tends to be a bit slow when it comes trading activity and overall gains. With the shortened trading week, thanks to Memorial Day, the summer slowdown is already in full force. This caused light volume and an overall downtrend for the markets this week.
Despite traders heading to the Hamptons for the summer, the amount of data released was swift and showed mixed messages. There were a few metrics that showed serious weakening, which helped play into the notion that economic growth is getting harder to come by. Moreover, earnings season is nearly over. With hardly any firms reporting this week, the markets had no catalysts for gains.
In the end, slow trading and the lack of real positives caused the markets to drift lower over the shortened week.
Check out last week’s Market Wrap here.