Stocks enter historically-weak midterm May with lowest expected return since 2007

The US stock market ended the month of April on a weak note, with the S&P 500 falling 0.8 percent on Monday.

For April, however, the S&P 500 rose 0.3 percent.

A repeat of the gain is unlikely in May, according to Ryan Vlastelica at MarketWatch.

Citing Jeffrey Hirsch, chief executive officer of Hirsch Holdings and editor of the Stock Trader’s Almanac, Vlastelica wrote that during past midterm election years, the Dow Jones Industrial Average fell 0.7 percent in May compared to the overall May average of 0.02 percent decline.

The S&P 500 declined 0.9 percent in midterm Mays while the Nasdaq Composite lost 1.2 percent compared to overall average May gains of 0.2 percent and 0.9 percent respectively.

Meanwhile, expectations for stock returns have fallen to their lowest point since before the financial crisis.

Another report by Vlastelica, citing Morgan Stanley, noted that as of the end of March, the expected return for the S&P 500 is 10.4 percent over the coming 12 months, the lowest expected rate since January 2007.