Equities down -4% in April and some wonder if this is the start of "payback" — still expecting May to be a positive month, with May FOMC (Wed, today) obviously important.

The video in this report is only accessible to members
The video in this report is only accessible to members
The video in this report is only accessible to members
The video in this report is only accessible to members

VIDEO: S&P 500 was down -4% in April, but we still expect May to be a positive month.  There is a gauntlet of data ahead but May FOMC is key which is Wed

Please click below to view our Macro Minute (duration: 3:14)

The video in this report is only accessible to members
The video in this report is only accessible to members

On the last trading day of April, the S&P 500 fell -1.6% and the Nasdaq down -2%, bringing total losses to -4%. Over the past 40 years, the only worse April return was 2012 (debt downgrade/peripheral Euro-area crisis). And after a strong first 3 months of 2024 (+10% gain), many wonder if the decline in April is the start of a broader "payback" period where stocks languish. In our view, May will ultimately prove to be a positive month for stocks:

The selloff on the last trading day of April was ostensibly due to the "hotter" 1Q24 ECI (employment cost index) which came in at 1.2% QoQ vs 1% consensus. But Euro area inflation data and the Japan JPY intervention also likely played some factors. Are wage pressures actually accelerating in the US economy? The ECI certainly implies this. But as the tweet by Nick Timiraos highlights, union pay surged in 1Q24 but non-union wages decelerated. So part of this 1Q24 surge is reflecting new wage packages for union ...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

More from the author

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)