Nasdaq, S&P, Dow futures edge up after a brutal April for bulls

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Stock index futures point to a slightly higher start Monday with Wall Street wondering if the buy-the-dip crowd can outweigh the sell-in-May-and-go away crowd.

“One of most famous finance adages says, ‘sell in May, and go away’,” eToro’s Ben Laidler wrote. “There is some truth to this. May-October S&P 500 returns half that of rest of year, driven by weak and low volume summer months. This compares to year end and Q1 strength as investors reposition for ‘new year’ and companies lay out plans.”

“We see poor seasonality more than offset by ‘less bad’ fundamentals and less policy fears, and hold off on capitulating on the markets.”

Nasdaq 100 (NDX:IND), S&P (SPX) and Dow (INDU) futures are up a little more than 0.1%.

In April the “US dollar was among the best performing assets on the month, following the Fed’s anticipated supercharged tightening combined with fluttering risk sentiment, making it the top performing G10 currency YTD,” Deutsche Bank’s Tim Wessel wrote. “Elsewhere, brent and WTI crude gained for the fifth month in a row, th latest run aided by growing speculation that Europe is prepared to countenance Russian energy embargos. Agricultural goods rounded out the top performers.”

“On the downside, equities and sovereign bonds both lost ground over the month, with the S&P 500 posting its worst monthly return since covid seized markets in March 2020. Credit and EM assets were also down over the volatile month.”

Rates are higher, but moves are expected to subdued ahead of the Wednesday FOMC decision. The market is almost fully pricing in a hike of 50 basis points.

The 10-year Treasury yield is up 3 basis points to 2.92%, while the 2-year is up 2 basis points to 2.72%.

Shortly after the start of trading the April ISM manufacturing index arrives, with economists expecting a small rise to 57.6.

Morgan Stanley has come out with a list of its 45 highest conviction stock picks.