Market Commentary
Domestic equities were positive in May, with smaller cap stocks outpacing their larger counterparts. Economic news had offered a mixed picture, where housing has benefitted from new home sales and construction while consumer spending has failed to pickup despite low oil prices. International markets cooled in May, with developed international equities flat and emerging markets ‐3.6%. Europe's economy continues to show improvement, boosted by a weaker currency and lower oil prices, though is still dealing with the Greek bailout issue. Interest rates rose again in May, which proved to be a headwind for core intermediate bonds, which lost 0.2% during the month.
Market News
  • Crude oil prices were essentially flat in May, as trading stabilized following months of large swings; WTI crude rose a mere 1% compared to a 25% increase in April
  •  S&P 500 earnings are expected to be weak again in Q1 (‐5.6%) given the strong dollar / weak oil dynamic; excluding the energy sector, S&P earnings are estimated to grow at 8.5%
  • Yields on US Treasuries inched higher in May in response to mixed economic data, reflecting the market's expectation that the Fed will wait until September to increase rates
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Notes: 1) Sources: Bloomberg, J.P. Morgan Asset Management, Morningstar, Hedge Fund Research, Bureau of Labor Statistics, Bureau of Economic Analysis. 2) Data as of the date of this report unless otherwise noted. 3) U.S. GDP measures the percentage change during the referenced quarter as published by BEA. 4) Consumer Price Index for All Urban Consumers: U.S. City Average, All Items Less Food and Energy is based on 12-month percent change as published by BLS.

Disclosures: This material is provided for informational purposes only and does not constitute an offer or solicitation by HFS, or its subsidiaries or affiliates, to invest in these indices or their constituent products. The data contained herein are from referenced sources which HFS believes to be reliable. This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. The views expressed are those of HFS. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investing involves a high degree of risk, and all investors should carefully consider their investment objectives and the suitability of any investment. Past performance is not necessarily indicative of future results. All data is as of the date of this report unless otherwise noted.


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