An old stock-market adage calls for investors to “sell in May and go away.” Yet to Fundstrat Head of Research Tom Lee, multiple factors make it wiser to “buy in May” this year. Stocks rose last week to extend their weekly win streak to three, and Lee believes more gains are likely for this month.

In his view, stocks last week were helped by soft jobs data from May 3, which helped convince investors that the “economy is no longer red-hot” and that the Fed is thus increasingly likely to stay dovish. Those numbers are also consistent with the latest weekly unemployment data, which rose to the highest level since August 2023.

As Head of Technical Strategy Mark Newton pointed out, the bond market’s immediate response to the jobless numbers was positive: “Rates plunged, and we also saw the dollar pull back.” In fact, Newton continued, “I sense that this could be the start of why the bond market actually starts to rally pretty sharply between now and late summer. I think yields are going to pull back. I think the dollar is going to also weaken, and I think that this recent weakening of economic data sort of sets the tone for why this is going to happen."

Summing his views up, Newton said, "My thinking is the S&P [500] will challenge the March highs of a...
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