“Sell in May and go away”. The phrase was born in London circles, when stockbrokers and wealthy investors used to leave the City for their summer holidays and returned just in time for the annual St. Leger's Day Stakes horse races, among London's famed races and the oldest in the world. Two centuries later, the expression survives because it rests on something more resilient than legend: the long-term seasonality of stock markets, a pattern of returns that, if nothing else, has a respectable track record.
“For editors, analysts and investors, the best use of ‘Sell in May’ is as a seasonal indication of risk and not as an absolute instruction. It reminds us that the historical ‘weather’ of the markets tends to become more unfavorable as the calendar moves toward summer. But in a world that is defined by tariffs, ‘enthusiasm’ for artificial intelligence, surprises in corporate results, tensions in the Middle East and changes in central banks’ interest-rate policy, the bigger forces may now matter much more than the month on the calendar. The old saying still encapsulates a truth about the memory of the markets. It just no longer guarantees their behavior,” as Manos Hatzidakis (Beta Sec.) emphasizes.
Confirming the above, Dow Jones and Russell 2000 ended yesterday’s trading on Wall Street at new all-time highs, with the former closing above 52,000 points for the first time (it is recalled that the US market will remain closed next Friday - Independence Day), while the EuroStoxx 50, EuroStoxx 600, Nikkei and Kospi indices also recently reached multi-year or all-time highs. Therefore, those who followed “sell in May” probably watched the markets’ new highs from some distance, despite the fluctuating tensions in the Persian Gulf.
Coming to the ATHEX, today was the last session of the month and of the stock market half-year and did not particularly resemble other sessions coinciding with half-year end, in which “window dressing” moves dominated.
On the contrary, whatever surprises came today came from the closing auctions, as the “delayed” portfolio restructurings closed the main ATHEX indices at their intraday lows and, along with them, six large-cap stocks as well (detailed reference follows later in the commentary)
Among the other characteristics of today’s session, the fact that during the overwhelmingly larger part of trading, the stocks with a negative sign were the ones that “led the race”, a very clear indication of the prolonged devaluation into which a significant part of the board has fallen.
June proved to be the third consecutive rising month, with monthly gains of 3.67% for the General Index and gains of 1.25% for the banking sector index.
Since the beginning of the year, the GI has posted gains of 15.99% and the DTR gains of 20.52%.
Stock of the stock market half-year: GEKTERNA (+73.09%).
Starting tomorrow, the new month will intensify discussions in brokerage offices, which will focus on forecasts – estimates for first-half banking results, which are expected to be satisfactory and may perhaps bring new reports, with upgraded target prices for the sector.
According to the financial calendars of the heavyweight banks and if there are no last-minute changes, PEIR announces first-half results on 29/7, ETE, EUROB and OPTIMA on 30/7, ALPHA on 31/7, BOCHGR on 4/8 (it will also announce payment of an interim dividend) and CREDIA on 6/8.
On the other hand, the end of the half-year will also bring the final assessment of the free float of several listed companies, as changes in the listing and trading regime in the European capital market are expected in the coming period, within the framework of implementing the Listing Act. Among the main interventions is the reduction of the minimum required free float percentage to 10%, subject to the relevant national incorporation of the new rules.
Euronext has already provided for the possibility of accepting a free float percentage lower than 25%, with a floor of 5%, while during the transitional period the application of a 10% threshold is being considered, in order to give greater flexibility to companies seeking listing on the Stock Exchange. Essentially, this announcement overturns the Kontopoulos regulation that set a 25% free float threshold, at least for companies entering with a valuation below 200 million euros (for listed companies with a capitalization above 200 million euros, the minimum free float percentage may be limited to 15%).
In any case, by mid-July the listed companies that continue to face the risk of being transferred to the “Surveillance” category, or to the Alternative Market, will be announced. Any requests that may arise will be examined separately. The regulation refers to an average half-year free float.
With positive signs and reactionary tendencies, the main European markets. It is recalled that tomorrow Eurostat will announce the data on the course of inflation across the Eurozone. Analysts expect a slowdown to 3%, from 3.2%.
Meanwhile, “the Eurozone economy appears to have acquired greater resilience against economic shocks, a fact that allows the European Central Bank to raise interest rates with greater ease, without fearing that it will cause financial ‘disturbances’,” said ECB President Christine Lagarde.
Yields in the bond market are moving in a stabilizing manner, for all issuers. The yield on the US 2-year note stands at 4.12%, on the corresponding 10-year at 4.39%, (the 30-year yield at 4.87%). The yield on the Greek 10-year note stands at 3.525%.
The General Index moved between 2479.78 (+0.50%) and 2461.73 points (-0.23%). At 17.00 it stood at 2468.9 (+0.06%), through the closing auctions it marked new lows at 2459.71 (-0.32%) and completed trading at 2459.77 points, with daily losses of 0.31%.
Turnover at 291.3 million, of which 25.8 million concerns pre-agreed transactions (OPTIMA, AKTR, MTLN, CENER, ΑΛΦΑ, PPC, ELPE, GEKTERNA, ADMIE, ETE, PEIR, KRI, OTE, BELA), with ETE, PEIR and ALPHA accounting for 38% of the total gross trading value.
Of the total turnover of 291.3 million, 268.7 million concerns transactions in FTSE25 stocks.