Will it be again, as it was the case last year: “Buy in May and go away?”

It’s of course too early to give a decent/satisfying answer to that for investors “classic” question.

If we look at one of the many “technical” charts of the S&P 500 Large Cap Index, the one which shows us also the 50-day, 200-day and 300-day averages, then we see that the “winning” averages formation for the S&P 500 Large Cap Index by which the 50-day average is above the 200-day average and both are above the 300-day average, which by the way came into place in June 2012 and that ended in August 2015 resulting in a gain of roughly 60 percent over that period, before then to be clearly re-established in September 2016 and that remains in place until now, based on these relative simple technical indicators we could say that share prices could continue their upward trend notwithstanding prices are extremely rich and therefore very fragile to any form of adverse shock, be it politically, which includes of course geopolitical events, or financial-economically of which the Fed’s monetary policy is an important factor. 

In the meantime, forex markets (non-commercial positioning) expect the dollar to remain relatively stable.

Besides that, on Friday we got, at first sight at least, a very weak reading of the advanced estimate of U.S. GDP for the first quarter that came in at 0.7 percent, which was well below the 1.3 percent that was expected.

Personal consumption expenditures came also in at only +0.3 percent, which was its weakest advance since Q4 of 2009.

The PCE price index, which is of course on the Fed’s checklist rose 2.4 percent, which was its quickest rate of increase since Q2 of 2011.

Markets did practically not react to these numbers, and in my opinion for good reason.

Friday’s data cover the first quarter and therefore is subject to the curse of the first quarter whereby the seasonable adjustment process fails to work properly.

In simple words this means that Friday’s data does not tell us a great deal about the economic reality of the United States and the reality is that GDP probably is a lot closer to 2 percent.

Therefore, investors could do well not putting too much faith in Friday’s data.

On Friday, we also got the employment cost index for civilian workers that rose 0.8 in Q1 of 2017, which represents a 2.4 percent y/y rise, while wages and salaries also increased 0.8 percent or 2.5 percent y/y and benefits gained 0.7 percent or 2.2% y/y.

All this is important as these numbers support the idea that further inflation normalization is under way and, if things stay the way as they are evolving for now, the Fed is bound for raising its Fed funds rate at least 2 more times this year.

It will be interesting to see if the Federal Open Market Committee (FOMC) will enlighten us somewhat more about this on Wednesday.

The question is not if the Fed will raise the Fed funds rate again in June, but how many rate increases could follow thereafter?

As next Sunday, we’ll get the second round of the French Presidential election it’s always interesting to take a look at what the big banks are thinking.

Today, BNP Paribas recommends shorting the euro, targeting 1.05 1.05 dollar per euro.

Also, here it seems that uncertainty is on the rise.

About President’s Trump first 100 days in office, and while keeping a safe distance from all the noise we have now, markets tell us (of course for what it’s worth) that Mr. Trump has failed to use momentum to implement his agenda. This is pretty well demonstrated in how market-based inflation expectations have come down since roughly the beginning of March.

To make a real assessment on President’s Trump achievements, to only thing I can say is that it’s way too early to do that.

The only thing that’s for sure is that uncertainty is here to stay with us for quite some time to come and we all know that markets don’t like uncertainty.

As an investor, you should better not forget that lack of volatility in the markets doesn’t mean that there is not uncertainty out there.

Lack of volatility should never lead you into the trap of complacency.

Calm markets have historically not been good indicators for stability ahead.

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments.