Franklin Templeton backs staying invested as history favors recovery.
UBS bets on Nasdaq 100 over Euro Stoxx 50 with a clear upside case.
Investor Sentiment
Bullish sentiment, or expectations of higher stock prices over the next six months, fell 7.9 percentage points to 38.1%, though it remains slightly above its long-term average of 37.5%.
Bearish sentiment, or expectations of lower stock prices, rose 5.3 percentage points to 39.7% and stays well above its historical average of 31%.
The gap between bullish and bearish sentiment remains below its long-term average of 6.5%.
Why the Seasonal Pattern ’Sell in May and Go Away’ Might be Worth Watching This Year
The well-known seasonal pattern “sell in May and go away” is back in focus. It traces its origins to England, where investors followed the saying “sell in May and go away until Leger Day,” a September horse race that marked the end of summer and the return to markets.
The idea comes from a long-term trend. Stocks have historically performed better from November to April, while returns tend to be weaker from May to October.
That said, “weaker” does not mean negative. The May to October period still delivers an average return of about 2.1% for the . It simply ranks as the lowest-performing six-month stretch compared to other periods.
Here is how different six-month periods stack up:
Although this was the lowest return among six-month periods, the S&P 500 rose during that period in nine of the last ten years:
2016: +2.9%
2017: +8%
2018: +2.4%
2019: +3.1%
2020: 12.3%
2021: +10.1%
2022: -6.3%
2023: +0.6%
2024: +13.3%
2025: +22.8%
If the S&P 500 enters May with gains of more than 4% for the year, the next six months tend to improve. The average return rises from 2.1% to 4.4%. That is the setup in 2026. From a statistical view, this supports a stronger outlook, though actual performance will depend on how conditions unfold.
Why the Nasdaq 100 Looks Attractive Now
Franklin Templeton Institute says selling now would be a mistake. It believes markets still have room to rise despite geopolitical tensions and shifts in the global order. The firm is one of the largest asset managers globally.
That view makes sense. History shows that after major negative events, markets usually recover losses quickly and continue moving higher.
UBS Group) highlights a different angle. It expects oil supply to stay tight through the year, keeping prices about 30 to 40% above pre-Iran war levels over the next six months.
Based on this, UBS suggests a relative trade: buy the and sell the . Since the war began, the US tech index has gained 8.3 percent, while the European index has fallen 5 percent, creating a spread of more than 13 percent.
The firm believes this gap can widen further. In the year after major energy shocks, the Nasdaq has gained around 20% on average, and sometimes much more. Based on that, it expects the spread to expand by another 10 to 15%. This is not a recommendation, just information to consider.
How can investors act on UBS’s view? One approach is to go long the Nasdaq and short the Euro Stoxx 50. A simpler route is to focus only on the Nasdaq.
In that case, two straightforward options are:
ETFs
There are many options available, but to keep it simple, one example is the Invesco EQQQ NASDAQ-100 UCITS ETF (LON:).
The fund tracks the Nasdaq 100 index and manages nearly $400 million in assets. It was launched on June 21, 2021, and is domiciled in Ireland. It has a total expense ratio of 0.20% and pays dividends quarterly.
Returns have been strong, with a gain of 96% over three years and 36% over the past year.
Futures
The minimum price movement for the contract is 0.25 points, equal to $5.
Contracts expire on the third Friday of March, June, September, and December.
Each contract is valued at $20 per index point.
The contract trades nearly 24 hours a day, with a 15-minute daily break.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such, it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remain with the investor.
