April proved to be a tepid month for the markets with the Dow Jones Industrial Average (chart) barely eking out a gain and both the Nasdaq (chart) and S&P 500 (chart) closed the month slightly in the red. However, I believe that May will be far from languid for stocks. A key barometer as to how equities will fair in May is the release of the April Jobs Report, which will be issued before the open tomorrow. Most economists are expecting a gain of 160,000 new jobs and the jobless rate to remain at 8.2%. A report out this morning indicated a sharp drop in weekly jobless claims which should bode well for tomorrow’s report.
Once the markets digest the employment numbers, the question then is, will the old adage “sell in May and go away” apply this year? Historically speaking, May is one of the most favorable months for the bulls to take profits in and for the bears to sell. However, we are in an election year and we have one of the most highly anticipated tech IPO’s later this month with the listing of Facebook, which looks to be priced at a potential valuation of up to $95 billion. One thing I think we can all look forward to is an increase in volatilty in the month of May, which means if you are a trader, an increase in opportunites.
Good luck to all 🙂