May Market Pulse

It’s the middle third of the year. The dog days of summer are ramping up. And, if you believe mainstream investment superstition, most investors and traders “sold in May and went away”.

Is there any truth to this sentiment? The numbers do not lie. Granted, drawing conclusions on one dataset is absurd. But if we were to stake our bet only on the information presented by the May 2023 numbers, they suggest that most markets do see a draw down of investment money for the month. Of course, that’s nothing to say about other metrics, such as investment volumes, which I don’t track here. Besides, getting to caught up in the numerical weeds will just bore most readers anyways. That’s why you hire me, to do the boring investing for you.

Here's a comical Bloomberg headline to help set the tone for this month’s treatise, which caught my eye as I was assembling my thoughts:

“Best currency in Argentina amid 100% inflation may be Taylor Swift tickets”(1.)

Imagine the economics lesson her fans are inadvertently receiving, most of whom cringe at that very word, though likely not as much as I cringe when exposed to Taylor’s “serenades”. But I digress. Sadly, her US fans will never appreciate why it’s cheaper to buy the concert ticket, flights and accommodations there than it is to just purchase the concert ticket in the US. Hoping they’d recognize the grander ramifications on a global scale would be nothing short of reaching. Perhaps one day, their light bulbs will glimmer.

But let’s whip the tenor of these insights in a more serious direction. It would be improper to ignore the likely effect another American showdown had on the investing world. It was promising to be another main event fight night, as the Democrat-controlled White House and Senate stood toe-to-toe with the Republican-controlled House of Representatives. Hanging in the balance was the US “debt ceiling”. As their representatives, President Biden and Speaker McCarthy let loose volleys of updates, promises and accusations, the spectators roared with anticipation. But with the final buzzer fast approaching, more “bets” were heading in the direction of worry rather than jubilation; the investment markets were reeling.

And yet, with the final seconds on the clock ticking down, low and behold the final result rolled in. With little surprise, the match ended in a draw, another financial crisis averted…for now. By that point however, the collateral damage had been inflicted on most markets for the month.

Yes, as with all previous “debt ceiling” crises in the USA, this “tin debt can” was again kicked further down the road. The American credit card had another arbitrary limit increase and things “returned to normal”, until the next debt crisis surfaces, which most assuredly will unless the Washington tycoons actually raise more revenues and/or decrease spending.

Not all markets were negatively affected by the D.C. Royal Rumble. Most especially noteworthy is the US NASDAQ, which perhaps played the lead indicator in the Rumble’s final verdict. A rising debt limit would flood the investment markets with money, or such was their speculation.

Not to be unnoticed are the gleeful returns in non-Western markets, such as Japan and Taiwan, where prices were closing in on 10% growth in one simple month.

There’s both a science and art form to investing. Numbers and logic must comingle with a creative imagination. It requires a passionate and determined drive, to shrugged off the blows and plow on. If you find yourself without such dedicated guidance, lets connect and discuss how we are better positioned to build and preserve your money so you can enjoy and share it long into the future.

All My Best,

Adrian Harasymiw Investment Advisor Pinnacle Sovereign Investments of ACPI

P.S. To review the May market numbers or download a PDF copy of this commentary, head over to the Monthly Market Pulse page on our website.

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(1.) Bloomberg