May Scorecard

The major indexes had a good month. The S&P 500 {SPX} was up over 3%. The Dow Jones Industrials {DJIA} was the laggard up just a little over 2.6%. The Nasdaq was the star, gaining almost 9%. According to CNBC, the SPX had its best month since December of last year and the Nasdaq had its best performance since October of 2003.*

However these major averages are still lower than where they started the year. Again according to CNBC the Nasdaq is still down almost 5% while the SPX is off about 2%.*

Only the SPX has managed to move ahead of its early 2004 highs. Even then the SPX has only managed to return a miserly 3% over these past 15 months (excluding dividends). In contrast the Nasdaq is lower by about 3% during the same period.

The market has started June off with a flourish due to positive comments on interest rates this morning out of a Federal Reserve Governor. Also monthly cash inflows {new money into mutual funds from retirement plans} is probably helping push us higher today.

Notwithstanding today's events, there is a higher probability that stocks will experience either a pullback in prices or some sideways movement in the next couple of weeks. After a strong May in which many stocks experienced almost parabolic upward moves, they would need some unlooked for catalyst to give us appreciation similar to the last 30 days. Not impossible of course, just less likely.

I am still comfortable with my early May post~ that the markets will at least be somewhere close to their breakeven mark for 2004 by the end of the month. Then we shall see what the rest of the summer might bring.

More on this later.

*CNBC, Morning Call, June 1, 2005.
~"Where We Are", Solas, May 1, 2005.
Please note market information is for informational purposes only. Unless you consult with Mr. English and he understands your investment profile, you act on information contained in this post at your own risk.