May Was a Bad Month For All the Indexes AFM Tracks

Here are the total returns for the S&P 500, MidCap 400, SmallCap 600, and other Indexes(May 2012)

For the S&P 500, this May’s -6.01% was the worst May since May 2010 when the index was down 7.99%. Other than 2010, we would have to go all the way back to 1962 to find a worse performance than this May’s.

Oil was way down, which is a good and bad thing. It’s good because we like paying less at the pump. It’s bad because it’s probably only down due to the economic outlook. Take a look at how closely oil and the S&P 500 track each other (click on the chart to see a larger version):

Oil and the S&P 500

The solid line represents oil (right axis) and the bars represent the S&P 500 Index (you guessed it…left axis).

This bothers me. Why? Because as soon as the S&P 500 starts moving up (which usually implies the economy is getting better), the price of oil goes with it. The price of oil can only go so high before it has a negative impact on the economy. I wish we had better oil data. I would love to see longer horizons for comparison charts.