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May Winners And Losers: Sell In May... Sell Bonds That Is

Tyler Durden's picture




 

DB's observations on May's best performers:

Whilst "Sell in May" didn’t work out for Equities it certainly did for Fixed Income. Indeed it was a volatile month for the asset class in general which saw Treasuries suffer their worst monthly total return performance since Dec 2009. The move in core US rates clearly had a negative impact on total return performances in US Credit with IG and HY benchmarks down -2.4% and -0.6%, respectively. The former clearly bearing most of the brunt as that the lower outright yield meant that IG returns was always going to be more sensitive to a rise in rates. Fixed income weakness was also a theme evident across European and Sterling credit with HY also outperforming IG on a relative basis. Whilst the negative total returns in Bunds (-1.5%), OATs (-1.6%) and Gilts (-2.6%) also had a negative impact on total returns, European and Sterling credit enjoyed better return profiles relative to their US counterparts in May.

Away from the shake-up in fixed income, USD strength and EM weakness were the other main themes in May. Indeed EM bonds, FX and equities were mostly  weaker although the notable exception here being Chinese equities which interestingly was also May’s best performer in our oft-used ranking chart below. Indeed the Shanghai Composite added nearly 6% in May to post its first positive monthly return in four months. Away from China, performance in Russian, Indian and Brazilian equities were -0.6%, +1.4% and -4.3%, respectively with the latter also coincided with a four week low in the BRL against the Dollar. The MSCI EM index was down 2.6% in May.

Back to equities whilst it was clearly a positive month the S&P 500 (+2.3%), sector performances were mixed. Indeed a micro theme that is gaining momentum on the back of a rise in Treasury yields has been the underperformance and rotation away from divided stocks. Using the S&P 500 sector as a guide the month saw defensive/lower beta Utilities (-8.29%) and Telecom (-6.58%) sharply underperform cyclical/growth plays in Financials (+5.08%), Industrials (+2.96%) and IT (+2.46%). In Europe, the Stoxx 600 and FTSE are up +2.2% and +2.8 – bringing their respective YTD performance to +10.1% and +13.9%. Finally in commodities, Gold and Silver are still lagging most other major asset classes with a YTD performance of -17% and -27%, respectively.

 

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Mon, 06/03/2013 - 07:59 | 3619812 scatterbrains
scatterbrains's picture

I'd guess these performance measures reveal the invisible hand of our central bankers efforts to reflate in a stealth way by printing and propping equities, naked shorting other markets that might otherwise reveal their ponzi such as gold and silver... but now having reached the end of their "stealth" methods they will have to come out in the open to save their system which correlates well with gold resting on it's lower long term channel.  The next moves will be huge in the pm's and miners as they wont pretend anymoar... in fact I can see the Bernank, rather than all cock sure,  apologetically explain to us why they must now openly print at Humphrey Hawkins etc. in order to save the world.. print print print.   Strap in niggas it's going to be epic

Mon, 06/03/2013 - 08:03 | 3619818 Crisismode
Crisismode's picture

 

 

Gold and silver will be valuable mediums of exchange long after the Bernank is rotting in his grave, and the paper dollars being eaten by the same worms consuming his cadaver.

 

 

Mon, 06/03/2013 - 10:22 | 3619894 Money 4 Nothing
Money 4 Nothing's picture

That chart speaks volumes.. or lack there of depending on what side of the investment trade you were on.

Barbaric metals win again, and will continue to do so till the day nobody needs goods and services.

Rare earths, the most popular vehicle of wealth storage for 4, 000 years of trade and commerce.  Universally accepted as a standard of known quantity setting a basic fundemental  trade metric based on a simple market principal.. What the market will bear. 

When this commodity broadly accepted for settling private debt based on conflicting  value system must be brought under control by the same Cabal that issues fiat debt to Nations. Pricing must be constantly adjusted / manipulated in order for their counterfeiting operation to remain relevant for their own fiat valuation sake. See why they have to keep the price discovery suppressed and hidden from the slaves? 

Precious metals are not "money", thank God. But converts into global debt laden fiat if you so choose. PM's don't owe anyone anything, fiat currencies owe the world because their issued as debt.

That's why TPTB despise this commodity, it disturbs their cornered market of counterfeiting paper based on their valuation system ... NOTHING! Its based on fraud, issued as the exclusive "unit of value" for settling private debt enforced by Imperialism.  

PM's act as a competing currency, or an alternate reference of value they wish never existed. akin to reality if global currencies were weighted on it's standard.

"Gold is money, everything else is credit"

-JP Morgan

 

Mon, 06/03/2013 - 08:59 | 3619908 Hooter Shaker
Hooter Shaker's picture

Looks like a BTFD opportunity to me.

Mon, 06/03/2013 - 09:40 | 3619987 Balvan
Balvan's picture

Gold and silver are just another speculative asset. Good luck people with your safe haven!

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