- U.S. stock indices fell in May, and have now fallen for six consecutive weeks, the longest losing streak since 2011. The Dow Jones Industrial Average lost 6.7%, the S&P 500 was down 6.6%, and the Nasdaq Composite lost 5.4%. International equity markets were also lower. The MSCI Europe Australia Far East Index (EAFE) lost 5.3% and the MSCI Emerging Markets Index lost 7.8%. The yield on the 10-year U.S. Treasury note fell to its lowest level since 2017. This reflects the concerns surrounding the China trade policy and the drop in inflation that started in the fourth quarter of 2018. Futures markets currently price in an 84% chance of the Federal Reserve cutting interest rates by year-end.
- U.S. trade policy and its implications for global growth remains a focus and a risk for investors. Risks to the markets include a policy error by the Federal Reserve, a prolonged global trade war, an economic slowdown in China and a military engagement.
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