In May, US Large Cap stocks were propelled higher on AI news and a debt ceiling deal being struck. The S&P 500 was up +0.4% and Nasdaq was up nearly +6% MoM. Growth stocks, including tech, telecom, and consumer discretionary, continued their YTD outperformance. Developed ex-US Large Cap stocks fell -4.1%, but are still up over +7% YTD. Inflation has slowed marginally, but recent readings remain elevated. Payrolls were unexpectedly high, with 339,000 jobs created, but the unemployment rate rose to 3.7%. The Household Survey revealed a rise in joblessness.

Please enjoy an in-depth discussion on getting comfortable with Private Investing as our panelists tackle the common questions about Private Investments:

Cutting Through the May Daze

The S&P 500 posted back-to-back gains in March and April, bringing year-to-date returns to nearly 10%. If you had not read the headlines, you’d never have guessed that on May 1 the U.S. would see its third major bank failure in as many months. In the days following, the Federal Funds target Interest rate reached a 16-year high, rumors of further bank failures circulated, and the Department of Labor surprised the market with an unexpectedly robust jobs report.

Beneath the surface of a resilient market and economy, the stresses of rising interest rates continue to reveal risks lurking below. If interest rates stay elevated, we believe regional banks will continue to face significant headwinds caused by the ongoing shift of deposits to larger money center banks and money market funds. In this context, we are reaffirming our guidance to clients to 1) maintain a modest underweight to growth assets and 2) prepare stability assets to deliver the liquidity and diversification necessary to position portfolios for the opportunities to come.