The S&P 500 continued up in early May, setting one new closing high, though changing its tune several times. It started singing, "Start spreading the news" that the U.S. would fully reopen soon. It then met resistance in the form of inflation and prices, and the tune changed to "Kiss the market goodbye, and point me toward ease and stimulus, we did what we had to do for ‘huge' gains, won't forget, can't regret, what we did for gains." The refrain then changed to "To mask or not to mask, that is the question. Whether 'tis nobler in the business model to suffer the suits and slings of (some) outrageous customers, politicians, and employees, or clear the path to let the flow of funds run like a river into corporate, even if its flow could change like the circled orb," as the index started searching for a base level, with reallocation, profit taking, and getting ahead of itself fighting the fear of losing out, COVID-19 optimism, and a consumer-led spending spree. The bottom line for May was a 0.55% gain, after April's 5.24% gain, March's 4.24% gain, and February's 2.61% gain (January was down 1.11%). The YTD gain was 11.93%, as the post-COVID-19 gain (from Feb. 19, 2020) was 24.16%, with the S&P 500 0.67% off its May 7, 2021, closing high.
The S&P 500 closed at 4,204.11, up 0.55% (0.70% with dividends) from last month's 4,181.17 close, when it was up 5.24% (5.34%), and the prior month's 3,972.89 close, when it was up 4.24% (4.38%). The three-month return was 10.31% (10.72%), the YTD return was 11.93% (12.62%), the one-year return was 38.10% (40.32%), and the index was up 24.16% (25.93%) from its pre-COVID-19 Feb. 19, 2020, closing high. The Dow® broke through 35,000 for the first time (May 10, 2021, 35,091.56), but it did not close there; it ended the month at 34,529.45, up 1.93% (2.21% with dividends) from last month's 3,874.85 close, when it was up 2.71% (2.78%) from the prior month's 33,072.88 close, when it was up 6.62% (6.78%). Over the three-month period, The Dow was up 11.63% (12.18%), up 12.82% (13.76%) YTD, and up 36.03% (38.79%) over the one-year period.
As for the Wall Street saying of "sell in May and go away," using the six-month change from the close of May to the close of October, this has been true 34.4% of the time in S&P 500 history (from 1928). However, it has not worked in the past nine years (based on total return, eight for stock price only).
A federal judge set aside the national moratorium on evictions (started under Trump and expanded under Biden), ruling that the CDC lacked the authority to issue it; the impact is still developing, but could be substantial. Treasury Secretary Yellen (formerly the Chair of the FOMC) said that "it may be that interest rates will have to rise somewhat," then pulled back on the statement, saying, "it's not something I'm predicting or recommending." The market reacted by pulling back, as interest rates and inflation concern grew, with the debate being when and how quickly they would rise. Biden will meet with Russia's President Putin on June 16, 2021, in Geneva.
Biden released his fiscal Oct. 1, 2022, USD 6 trillion budget (USD 1.8 trillion deficit), which included his USD 4 trillion American Jobs Plan and American Families Plan bills as well as a tax increase to help pay for the expenditures. The proposal was expected to meet with strong opposition from Republicans, but with Democrats controlling all three houses (the White House, Senate, and House of Representatives), the passage of significant parts is expected.
The COVID-19 spread and death rate continued to get worse in India (from cities into rural areas), as the country set a new global daily case record at 414,188, parts of the country went into lockdown, and medical shortages became national. Meanwhile, other parts of South Asia saw rising cases and took precautionary actions. In a quick reversal, Singapore and Taiwan, which had had a low number of COVID-19 cases and a slow vaccination rate, posted sharp increases in cases.
U.S. vaccine rates continued to slow, as Biden took steps to encourage the population to get vaccinated, setting a goal of 70% receiving at least one shot by July 4, 2021 (U.S. Independence Day).
The CDC approved Pfizer's COVID-19 vaccine for individuals as young as 12 (it was previously 16), meaning 17 million youths became eligible for vaccination. The CDC announced that individuals who were fully COVID-19 vaccinated did not need to wear a mask in public (they're still required on planes, trains, and buses, and in most municipal buildings), encouraging those who hadn't been vaccinated to do so. U.S. President Biden said the U.S. would share at least 20 million doses of U.S.-authorized COVID-19 vaccines with other countries by the end of June. The U.S. also pledged 60 million doses of the AstraZeneca vaccine, once it is approved for use in the U.S. The EU said it would create a vaccine certificate system to aid in travel within the EU.