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.
- 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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