Have Investors Been Skipping School?

Markets have continued their march higher after a strong rebound in April. However, it's not just the reduction of tension in the Middle East that has markets moving. The

underlying fundamentals have improved and recession fears have so far proven ambiguous. It's almost as if investors have forgotten what moves markets. This week's musings are inspired by the 1986 movie "Ferris Bueller's Day Off." Here is some trivia about the film:

• The movie had a few up-and-comers and some character actors, so the budget was small, only $6 million. Can you imagine making a film in this day-and-age for that little amount of money? It only generated a little more than $70 million at the box office, but that was good enough to land it in the top 10 highest-grossing movies in the U.S. for 1986.

• This film is one in a long line of successful projects for John Hughes. Hughes was coming off the heels of "Sixteen Candles" when he wrote the script for this film in less than a week. The original cut of the film was two hours and 45 minutes. The editing process took an hour off the final version.

• Hughes said that he had Matthew Broderick in mind when he wrote the character of Ferris. It is said that Hughes based Ferris off of a neighbor of his who was relentlessly pursued by the school principal over his truancy - 27 days absence compared to only 9 days for Ferris!

• This movie put Ben Stein on the map. Hughes knew that Stein had a degree in Economics and asked him to present an actual economic lecture in his scenes.

• For his role as a drug addict in the police station, Charlie Sheen stayed awake for more than 48 hours prior to shooting his scenes.

• During the parade, several people are seen dancing (construction workers, window washers, etc.). These were not extras and had nothing to do with the film. Hughes saw them dancing to the music being played and decided to include them in the film.

Here's what we've seen so far this week...

Life Moves Pretty Fast. Ferris takes the attitude that we should seize the day and experience life's moments when they occur. For investors, that could mean stepping

back from the constant "wall of worry" noise and enjoy the ride. The month of April saw greater than a 10% return when all was said and done.1 According to the table, when the market is positive more than 5% in the month of April, the rest of the year has a better-than-average probability of ending positive, historically speaking. For the "sell in May" crowd, when April is up more than 5% the S&P 500 Index has been positive 90% of the time in May, going back to 1950. The remainder of the year has been positive 80% of the time, with an average return of +12.5% when April is up more than 5%, according to historical averages.

Investors, however, have been met with headlines so far this year meant to invoke fear and worry when it comes to investing in the markets. If one relied on the headlines to

make investment decisions, staying out of the market might seem the better option. And yet, the S&P 500 Index is making new all-time-highs and is up more than 7% for the year. Before markets even had a chance to finish the first week of the new year, there were headlines about "alarms" that tariffs and high valuations could push markets lower.2 In March, investors were faced with headlines about higher oil, a greater chance of recession3, and reasons to be worried about markets.4 As those headlines have proven to lack predictive effectiveness, a recent headline to start the month of May renewed recession fears despite a recovery in equities greater than 15%.5 Investors would be better served sticking to their financial plan and taking the advice of Ferris to "stop and look around once in a while" rather than focusing on every negative headline that comes across their screen.

Ferris Bueller On Line 2.  Investors have been led to believe that the labor market is on it's last leg and economic growth is grinding to a standstill. Recent economic data

released this week would indicate otherwise. Today's Jobs Report showed another solid month of job growth. The market was expecting only 75,000 jobs added for the month of April, but the report showed at least 123,000 jobs added. In addition, last month's report of 186,000 jobs added in March was revised higher to 190,000.6 If this recent trend continues into the latter half of the year, it could mean that the "low fire, low hire" environment in the labor market is coming to an end. Jobless Claims have been historically low and fairly steady this year, so any pickup in hiring would break the "low fire, low hire" trend.7

Economic growth, contrary to recent headlines, does not appear to be abating. The Atlanta Fed's estimate of 2nd quarter GDP for this year is at +3.7%.8 Most economists

agree that 3% GDP growth or higher is considered robust. Corporate earnings reports for the 1st quarter continue to come in higher than the historical average. In addition, analysts have increased earnings estimates for the 2nd quarter by at least 2.1% - the largest increase since the 2nd quarter of 2021.9 Consumer spending, which accounts for nearly two-thirds of GDP in the U.S., continues to increase. Consumer Credit for March came in higher at $24.9 billion, compared to February's results at $8.9 billion.10 Redbook Sales are higher by 7.8% on a year-over-year basis.11 If hiring picks up, consumers should have sufficient funds for spending, which could push corporate earnings higher, leading to further economic growth. Unlike Principal Rooney who is fooled by Ferris and his friend, Cameron, investors shouldn't be swayed by a headline or two, but, rather, should focus on fundamentals, sound financial plans, and reasonable investments.

Here's the monologue where Ferris tells us the secret to life (with authentic MTV intro)...

1. S&P 500® | S&P Dow Jones Indices

2. https://www.fool.com/investing/2026/01/02/stock-market-alarm-bad-news-trumps-tariffs-sp-500/

3. https://www.reuters.com/business/us-stocks-sell-off-iran-war-concerns-deepen-2026-03-03/

4. https://www.marketwatch.com/story/history-shows-investors-are-right-to-worry-about-2026-being-a-bad-year-for-u-s-stocks-2d82d09b

5. https://www.businessinsider.com/recession-stock-market-crash-outlook-gary-shilling-inflation-consumer-spending-2026-5

6. United States Private Nonfarm Payrolls

7. United States Initial Jobless Claims

8. GDPNow - Federal Reserve Bank of Atlanta

9. Analysts Making Largest Increases in Quarterly EPS Estimates for S&P 500 in 5 Years

10. United States Consumer Credit

11. United States Redbook YoY

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