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The saying “sell in May and go away” could be good advice this year. Despite the shortened trading week due to the Independence Day holiday, stocks waived and experienced high volatility. The culprits were the typical actors we’ve seen all year. This included the Federal Reserve. The release of the latest round of FOMC minutes helped calm investors’ worries about inflation, hinted at the potential to raise rates early, and revealed the general state of the economy.
However, the economic data released was less than ideal. A surprise jump in unemployment claims, lower services activity and a dip in overall economic optimism sent stocks lower during the week.
The lack of corporate events didn’t help either. With the Fourth of July holiday, the number of firms reporting earnings over the last few sessions was next to nil. Meanwhile, many firms were reluctant to report any sort of deal-making or major announcement. This provided less lift to the major averages for the week. The current congressional recess and lack of progress on the infrastructure bill didn’t help either.
All in all, the shortened trading week proved to be a volatile one with the major averages gaining slightly over the trading sessions.