This is a new installment in an ongoing series where Marc Bautis and colleagues comment on hot topics in the financial industry. This week, Kayla Waller, Financial Planner, fills us in.
May 2023 Market Summary
May was a mixed month for stocks as the NASDAQ surged, the S&P remained about flat, and the Dow Jones Industrial Average took a hit. The NASDAQ rose 5.9% in May largely thanks to gains in the semiconductor space, notably by NVIDIA (NVDA), Advanced Micro Devices (AMD), and Broadcom (AVGO). The S&P 500 rose 0.4%, while the Dow Jones Industrial Average lost 3.2%. It was a down month around the world–Emerging Markets slipped 1.7%, and Developed Markets sank 4.1%.
Only 3 of the 11 US stock sectors were positive in May as Technology, Communication Services, and Consumer Discretionary led the way. On the flip side, Energy fell 10%, followed by Materials (down 6.9%) and Consumer Staples (down 6.2%).
Unemployment increased by 0.3 percentage points to 3.7% in May one month after reverting back to its lowest level since 1969 (3.4%). Inflation remained essentially unchanged MoM, and the Federal Reserve issued its 10th consecutive rate hike at the start of the month, bringing the Fed Funds Rate to 5.25%. Oil was down over 6.5% in May, bringing both WTI and Brent down over 41% from their highs last year.
US Treasury yields spiked sharply in May amid debt ceiling risk. The 1-Month Treasury Bill surged 0.93% to 5.28%, followed by the 3-Month at 5.52% (+0.42%) and 6-Month at 5.46% (+0.40%). Long-term bonds, such as the 10-Year, also got a lift, but its yield of 3.64% still puts it as the lowest on the curve.
Americans Are Experiencing “Tip Fatigue”