(New York)

One of the old adages of the market is to “sell in May and go away”, or get out of stocks in the summer and come back in the fall when everyone gets back to work. That axiom holds water when you look over many decades, but its record in recent years has been spotty, with summer returns over the last five years being quite solid (though still less than November-April). Over the last five years, the average return from May-October has been 4.31% while in November-April is has been 5.53%.

FINSUM: Anyone’s guess what will happen this year, but the last few summers have been more positive. 5 years is a pretty short sample size though.

(Washington)

Don’t look know, but market could be facing a big risk in September. Investors will remember that Congress voted to suspend the debt limit until March 1st. That date has come and passed and now the Treasury is using extraordinary measures to meet the US’ payment obligations. However, it says it will exhaust those options by September, meaning the US could end up in a major cash crunch.

FINSUM: Get ready for another early autumn political crisis over the budget, deficit, and debt ceiling.

(New York)

The markets are gleeful right now. Stocks are up 25% since their bottom in December, and things on the economic and Fed fronts look rosy. However, Citi says investors need to get out of some assets before “rain spoils the picnic”. The bank is worried about the difference between asset prices and underlying economic conditions (when looking globally). Its biggest area of worry is in corporate bonds, which have seen spreads to investment grade narrow sharply, especially in high yields, which look overvalued. Investment grade debt is troubling too, as debt levels jumped by their biggest amount in 18 years over the last 4 months. Citi thinks companies are burning through way too much cash for the growth levels they are achieving.

FINSUM: So Citi thinks this is going to be a bond market reckoning (which would surely impact stocks too). That is different than the consensus, but perhaps a good way to view the situation.

(New York)

A new poll of professional money managers has just been released, and the study shows that they think Trump is going to win in 2020. Amazingly, 67% of professional money managers say Trump will win the election versus just 28% who believe the Democratic candidate will win. What is eye-opening is that many polls outside the financial industry show the Democrats leading. Managers also scored the performance of Trump and the two chambers of Congress. Trump got the best grades of the three, but none of the scores were high.

FINSUM: This does not surprise us. All our business, both as it concerns publishing and advertising, is with professional money managers, and the one thing we know for sure is that the president has a very strong following in this community.

(Seattle)

Tell us a mega cap stock that has 50% upside in the near term. Not so easy. That is what makes the current discussion of Boeing so compelling. The stock has been hurt by the 737 MAX fallout after the Ethiopian Airlines crash in March. Yet, overall, the trend for Boeing and other aeronautics companies is strong. Jefferies analyst Greg Konrad finds the stock so compelling, he believes there is 50% upside. More than 65% of analysts covering the stock rate it a buy.

FINSUM: It seems like there is a pretty clear path to put the 737 MAX issues in the rear view mirror and get the stock back on track. Could be a good opportunistic buy.