Market Perspective for May 31, 2019

Equities slipped as the technology sector led the market lower for the month. The Nasdaq lost 7.40 percent, while the Russell 2000 Index declined 3.21 percent. The S&P 500 Index declined 2.62 percent and the Dow Jones Industrial Average 3.01 percent to close the month.

Despite the modest correction, the outlook continues to be positive. Consumer confidence jumped in May according to the Conference Board’s survey. First quarter GDP growth was revised to 3.1 percent, down from 3.2 percent initially, but higher than the 3.0 percent consensus forecast. The Bureau of Economic Analysis reported a spike in personal income growth in April, from 0.1 percent to 0.5 percent. Consumer spending grew 0.3 percent and core inflation was 0.2 percent. The Chicago PMI, a measure of manufacturing activity in the Chicago Fed’s region, increased in May.

Over the past few weeks, investors with positions in iShares Edge MSCI Minimum Volatility USA (USMV) and Vanguard Dividend Appreciation (VIG) continues to outperform the broader market.

Emerging markets also outperformed this week. Despite the current trade friction with China dominating the news, iShares MSCI Emerging Markets (EEM) advanced 1.98 percent on the week. iShares China Large Cap (FXI) rallied 1.15 percent. The U.S. Dollar Index climbed 0.3 percent.

Bonds rallied for the week. The 10-year Treasury fell to a new 52-week low of 2.14 percent. Fidelity Corporate Bond (FCOR) gained 0.77 percent, while iShares 20+ Year Treasury (TLT) advanced 3.16 percent.


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