news and events

Check out our Capital Markets Recap for May!



  • U.S. equities saw a significant downturn in May. The breakdown of U.S.-China trade negotiations and new tariffs on Mexico’s imports brought fears of a slowdown in global growth. U.S. manufacturing PMI fell to levels not seen since September 2009, with new orders falling for the first time since August 2009. Businesses emphasized trade tension concerns and weak demand as reasons for the lowest confidence in future output growth since the data was first collected in 2012. The unemployment rate declined by 0.2% to 3.6% in April with 263,000 jobs added during the month. An increased consumer confidence reading in May was directly correlated to the lowest unemployment rate since December of 1969.
  • International equities and emerging market equities posted negative returns in May. U.K. manufacturing displayed signs of contraction in May with new orders weakening both domestically and abroad following the delay in the Brexit date. Contraction in Eurozone manufacturing continued in the month. Eurozone companies cut spending and hiring as fears of a further downturn in demand were exposed. In China, manufacturing improved with backlogs of work expanding, but business confidence is at a record low as a potential China-U.S. trade war looms.
  • Fixed income investment returns were positive in May except for high-yield investments. The yield on the 10-year U.S. Treasury note fell to 2.14% as investors moved to less risky assets. The 10-year Treasury note yield also fell below the three-month Treasury bill, which often occurs ahead of recessions. The Federal Reserve held the target interest rate at 2.25% – 2.50% at its May meeting and the bond market has priced in three rate cuts between now and 2020.


  • Broad U.S. stocks were negative (down -6.5%) for the month but remain positive on a 1-year basis (up 2.5%).
  • Size – Mid-cap (down -6.1%) and large-cap (down -6.4%) equities outpaced small-cap (down -7.9%) equities in May and large-cap stocks led on a 1-year basis over small-cap stocks (3.5% vs. -9.0%).
  • Style – Growth stocks (down -6.4%) slightly outpaced value stocks (down -6.6%) in the month and continue to outperform on a 1-year basis (4.4% versus 0.5%, respectively).


  • During the later stages of this business cycle, the fundamental health of the U.S. economy remains solid, supported by a strong labor market and reasonable consumer spending.
  • We believe successful investors have the discipline to remain focused on long-term investment goals, maintain a globally diversified portfolio, and avoid the temptation of timing the market.
Sources: Morningstar, Inc., Barclays Capital, Russell and MSCI, U.S. Bureau of Labor Statistics, The Conference Board, IHS Markit, The Federal Reserve (central bank of United States), The Bureau of Economic Analysis (U.S. Department of Commerce) & U.S. Department of Treasury

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