Dow Jones Index has worst May since 1940

DJI May10.png‘Sell in May and go away’ seemed a good tactic to the blog at the beginning of the month.

It worried that we might now be approaching the ‘drawn-out fundamental downtrend’ phase of the current cycle. And in spite of several major ‘relief’ and ‘short-covering’ rallies, financial markets have continued to suffer.

The US Dow Jones Index has been one of the worst affected. As the chart from the Wall Street Journal shows, it is down 8%. That’s the worst May performance since 1940.

And its not alone. China, supposedly the current growth engine for the global economy, has seen the Shanghai market fall 6%. It is now down 18% since the start of the year.

The chemical industry, as I note in my ICIS interview below, is a very good leading indicator for the world economy. Equally, stock markets seem to be taking a more cautious view of the general economic outlook.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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