Animal Spirits

May’s US employment report is the big event in the week ahead, as stocks enter the often-weak month of June. Stocks are finishing May with a mixed performance as the talk is still about when the fed will start tapering and whether inflation is truly transitory this time around as the developed world looks to rebound from Covid, while the developing world faces devastating third waves with a tepid vaccine rollout hampering efforts to acquire herd immunity. June is not historically a strong month for stocks globally. Bespoke Investment Group points out that over the past 50 years, the Dow has gained just 0.12% in June and has been positive 52% of the time. But over the past 20 years, June was far weaker, gaining only 40% of the time. June’s performance is tied with September as the worst month of the year, with an average Dow decline of 0.7%, according to Bespoke. Michael Avery speaks to Chris Holdsworth, chief investment strategist at Investec Wealth and Investment.