Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Briefing highlights

  • Sell in May? Not this year, study says
  • Stocks, loonie, oil at a glance
  • Bombardier restructures aero units
  • BCE profit jumps
  • Bank of England raises forecasts
  • SNC-Lavalin profit slumps
  • Required Reading

Hold that thought

“Sell in May and go away” may not be a strategy investors want to follow this year, Société Générale suggests.

First, a look at this adage: The idea is that some stocks don’t do as well in the warmer months of May to October as they do in the cooler November-April period.

So you should dump stocks and stay out of the market, according to Investopedia, until St. Leger’s Day, the day of a major British thoroughbred horse race in mid-September.

Story continues below advertisement

This, Investopedia says, refers to the fact that British bankers and others would quit London for the country in the summer, while American investors also went on vacation.

Société Générale’s Sophie Huynh, a multi-asset strategist, studied performance since 1970 and found “that ‘colder’ months indeed outperform ‘warmer’ months, both in terms of the S&P 500 and world equities.”

Ms. Huynh wanted to know what was behind that, and whether that strategy could work for 2019.

Her conclusion: “’Sell in May and go away’ won’t work this year.”

And it’s all because of corporate earnings, she said.

“When we look at the average path of earnings expectations – we use weighted year-over-year growth in earnings per share – through the year, we make two conclusions: 1) as highlighted by our European equity strategists, we observe the same pattern of downgrades each year as expectations are always too optimistic early in the year,” Ms. Huynh said.

And the second point is that “the downgrades are clustered mainly in June to October of each year, with a bottoming out at the end of the year.”

Story continues below advertisement

Here’s how this year differs, though:

“We started 2019 with already quite pessimistic expectations,” Ms. Huynh said.

“At that point, there was a real acknowledgment that we are in a quite late stage of the economic cycle,” she added.

“Markets are rather efficient, with [2019 estimated U.S. earnings per share growth] gradually being downgraded, from 10 per cent in September, 2018, to 3.2 per cent currently.”

Ms. Huynh expects U.S. corporate earnings growth to bottom out because it’s too soon for an earnings recession.

“A lot of bad news is already reflected in expectations, while China’s ongoing monetary and fiscal support and central banks’ ‘Great Retreat’ should put a floor under risky assets for now,” she said, referring to the fact that the world’s major central banks are backing away from interest-rate increases.

Story continues below advertisement

“In the near term, we see the potential for S&P 500 to reach 3,000 – the ‘sell in May and go away’ strategy is less likely to work this year!"

Read more

Markets at a glance

Read more

Bombardier restructures

Bombardier Inc. is restructuring its aerospace businesses, with plans to sell its related component units in Belfast and Morocco in the process.

The plane and train maker said today it will put all of its aerospace assets into one unit known as Bombardier Aviation, its focus on operations in Montreal, Mexico and Texas.

Bombardier also reported a quarterly profit of US$239-million, or 8 US cents a share, up from US$44-million or a penny a year earlier.

Adjusted, the company lost US$122-million, or 7 US cents, compared to a profit of US$35-million or a penny a year earlier.

Revenue slipped to US$3.5-billion from just over US$4-billion.

Story continues below advertisement

Bombardier has already cut certain projections for the year.

Read more


BCE profit jumps

From The Canadian Press: BCE Inc.’s first-quarter profit jumped 12 per cent from a year earlier as revenue increased across its communications divisions. Profit attributable to common shareholders rose to $740-million, or 82 cents a share, from $661-million or 73 cents a year earlier.

Bank of England raises forecasts

From Reuters: The Bank of England lifted its growth forecasts but warned Brexit continued to cloud the outlook for monetary policy as it held its benchmark rate steady at 0.75 per cent and pointed to higher rates down the road.

Maple Leaf misses estimates

Story continues below advertisement

From Reuters: Maple Leaf Foods Inc. reported a lower-than-expected first-quarter profit, hit by higher costs as it invested more in new initiatives and capacity expansion. Profit rose to $50.1-million, or 41 cents a share, from $27.9-million or 22 cents a year earlier.

Caterpillar boosts dividend

From Reuters: Caterpillar Inc. will issue a record dividend for the second quarter, up 20 per cent from its previous payout. The dividend of US$1.03 a share will be paid on Aug. 20 to shareholders at the close of business on July 22.

Also ...

Required Reading

Collapse could double orphan wells

The collapse of an Alberta natural gas producer threatens to more than double the inventory of orphan oil and gas wells in a province already struggling with a spike in unfunded cleanup costs, Jeffrey Jones and Jeff Lewis report.

Story continues below advertisement

Oxford selling stakes

Oxford Properties Group is planning to sell half of its ownership in the Fairmont Banff Springs, Chateau Lake Louise and two other resorts in the Canadian mountains, in what could be one of the biggest hotel deals in recent years. Rachelle Younglai reports.

Experts warn of costs

Some experts caution that the surging costs associated with climate change could start to hit insurance profitability if changes aren’t made to flood mitigation strategies in particular, David Berman writes.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies