<p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">The month of May has arrived. We examine the old market adage of “Sell in May and go away” across the three different regions in the USA, Europe and Asia. </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="font-family: Calibri;" face="Calibri"><span style="font-size: medium;" size="3">Since 1999, the average performance in May across the three regions is -0.8%, with 58% of the years registering negative performance. The best performance is 2009 with a performance of 9.5%. On the other hand, the following year in 2010 registered the worst performance of -10.2%. </span></span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Among the three regions, the adage works best in Europe with the region registering negative performance 68% of the years. Asia-Pacific is not far away with negative performance 63% of the years. The adage do not hold true for the USA with negative performance only 37% of the years. Therefore, the USA is the best place to hide for any sell-off in May. </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="font-family: Calibri;" face="Calibri"><span style="font-size: medium;" size="3">This year, the equity market has consolidated within a range as it adjusts to a new phase from <b>Goldilocks</b> to a <b>Reflation</b> regime. Earnings growth have been strong with several companies reporting 1Q18 earnings better than consensus. Stronger earnings growth and gradual rise in interest rates have provided support to the equity markets. Trade war tensions have also declined with a high-level US delegation expected to visit China to resolve trade issues between the two countries. Improvement to the US-China trade relations could boost risk assets and avoid the negative performance in May.</span></span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">On the other hand, the US 10-year yields have climbed to the 3% handle with the US Dollar rising above the 200-days moving average to 92.37. Although geopolitical tensions has rescinded in the Korea peninsula, it has risen in the Middle East region. The US, together with the UK and France, has recently launched missile strikes in Syria. Tensions between Israel and Iran in Syria are also escalating ahead of a critical May 12 deadline for the Iranian nuclear deal. Any protracted conflict in the Middle East or faster-than-expected interest rate increase could present a shock to the market and lead to a sell-off in May. </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">The “Sell in May and Go away” aphorism could still hold true this May.</span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="text-decoration: underline;"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">MSCI Indices performance (USD) in May</span></span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><table width="508" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td width="112" nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Year</span></p></td><td width="91" nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">USA </span></p></td><td width="91" nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Europe </span></p></td><td width="115" nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Asia Pacific </span></p></td><td width="100" nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Yearly Average</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2017</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">3.9</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2.6</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2.5</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2016</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.6</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.6</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.4</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2015</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.4</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.5</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2014</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">3.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.8</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2013</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.9</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-5.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.1</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2012</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-6.4</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-13.0</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-10.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-9.8</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2011</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-4.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-2.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-2.6</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2010</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-8.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-12.6</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-9.8</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-10.2</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2009</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">5.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">11.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">12.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">9.5</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2008</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.4</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.5</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.0</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.3</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2007</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">3.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.9</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2.7</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2.3</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2006</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-3.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-3.8</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-6.6</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-4.5</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2005</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">3.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.0</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.0</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2004</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1.0</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-3.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.3</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2003</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">5.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">6.0</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">5.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">5.5</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2002</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.9</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.2</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">3.8</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.6</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2001</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.5</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-5.4</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.7</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">2000</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-2.7</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.0</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-5.8</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-2.9</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">1999</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-2.4</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-4.8</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-5.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-4.2</span></p></td></tr><tr><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">19 years Average</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">0.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.3</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-1.1</span></p></td><td nowrap="nowrap" valign="bottom"><p align="center"><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">-0.8</span></p></td></tr></tbody></table><p><i><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Source: Bloomberg</span></i></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3"> </span></p><p><b><span style="font-family: Calibri; font-size: medium;" face="Calibri" size="3">Edmund Chan, CFA</span></b></p>