Ad Hoc Commentary – sell in May and come back in Jun

The S&P500 seems to be topping up here, and we probably need a rest before rallying higher. If you plot UST10y yields versus S&P500 (USGG10YR Index SPX Index HS on your Bloomberg), you will see that UST10y yields tend to lead any selloff in S&P500. UST 10y is currently re-testing the support of 2.58. If this level gives way, we could see a selloff in equities and it is probably wise to take some money off the table. Equities are still in a long term bull market, but the short term is stretched.

Good luck in the markets.