May flowers

The old market adage to “sell in May and go away” has given way to the more poetic saying “April showers bring May flowers.” After falling 4.2% in April, the S&P 500 Index has risen 5.6% month-to-date, revealing its best May performance since the 1970s, according to Morgan Stanley. All eyes are on AI powerhouse Nvidia which is reporting this week, after 93% of S&P 500 member companies already have their 1Q24 results out. Among those already done, 78% have reported a positive earnings surprise, according to FactSet. On the other hand, despite the positive earnings momentum, 59% of S&P 500 have issued guidance below expectations. Nevertheless, as a whole, S&P 500 company earnings are on track to increase 11.1% year-on-year in 2024, an increase from the 10.8% growth rate expected at the end of March 2024. Of course, the earnings season is not over until it’s over. 

Source: Factset, May 2024.