TrustsEstates_dv716064_Feature_1920x945

05.31.19

Market Pulse: May 2019 Economic Highlights

BY NP Investment Team

What’s happening: highlights from the NP Investment Team

“Sell in May and Go Away” is a well-known financial world adage, based on the historical underperformance of some stocks in the six-month period commencing in May. Unfortunately, the sell-off in the equity markets this May has not been driven by warmer weather and investors out on vacation but rather on concerns about a global growth slowdown due to the trade war.

The S&P 500 is down over 5% for the month of May with tensions between the U.S. and China heating up over trade issues. News of a jump in tariffs on Mexico is certainly not helping the global growth sentiment, which is already sagging. The odds of two rate cuts in the next year are now almost fully priced into the markets, but there is still time to work out a deal before a cut becomes necessary and the U.S. economy is still on solid footing. Unemployment remains at historically low levels; wage growth is accelerating, which will support the consumer; and the recent drop in mortgage rates is boosting the housing market.

Leaders and Laggards: What’s Up and Down in the Stock Market?

Economic Sectors

May 2019 (through 5/30/19)

Year-to-date
2019 (through 5/30/19)

Energy

-10.26%

3.57%

Health Care

-1.78%

1.37%

Consumer Discretionary

-6.39%

14.05%

Information Technology

-7.43%

17.53%

S&P 500

-5.33%

11.25%

Industrials

-6.72%

13.21%

Consumer Staples

-2.62%

10.76%


With concerns surrounding slowing global growth in the month of May picking up, sectors that have led the market year to date have pulled back the most led by the energy sector and information technology sectors. The health care sector has been a relative outperformer this month but for the year remains under pressure due to regulatory concerns surrounding drug prices as we head into the election season, but we remain positive on this group over the long term.

Click here for more information about NP’s investment capabilities.