Capitalize on today’s evolving market dynamics.
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4.2%
The U.S. unemployment rate in May, the same as the previous two months.
Real estate investment trust (REIT)
A company that owns, operates or finances income-generating real estate. Like mutual funds, REITs pool the capital of numerous investors, allowing individual investors to earn dividends from real estate investments without having to buy, manage or finance any properties themselves.
High frequency data reflect a solid economic backdrop. Weekly retail sales and credit and debit card transactions indicate consumers continue spending at a healthy rate, supporting economic activity. Movie theater ticket sales, restaurant reservations and air travel activity corroborate broader consumer spending strength. Minimal supply disruptions stemming from tariffs have emerged thus far despite a drop in imported goods from $347 billion in March to $278 billion in April.
― Bill Merz, CFA, Senior Vice President, Head of Capital Markets Research and Portfolio Construction, U.S. Bank
Quick take: Last week’s constructive non-farm payroll report reflects a balanced labor market that continues to support consumer spending and broader economic growth, particularly the service sector. Recent trade data evidence tariff-related impacts through lower imports and weaker-than-expected manufacturing purchase manager indices. This week’s May Consumer Price Index and Producer Price Index reports will provide an inflation update in the wake of rising tariff revenue.
Quick take: A benign U.S. jobs report helped lift both international and U.S. stocks last week despite ongoing concern around tariffs, government spending and the public spat between President Trump and Tesla CEO Elon Musk. Emerging markets outpaced developed international and U.S. indices. Year-to-date, international equities continue to outpace domestics, while U.S. large-caps are outperforming smaller companies. First quarter S&P 500 reported revenue was in line with expectations while earnings exceeded them.
Quick take: Stronger-than-expected payroll and wage growth drove bond yields higher last week, weighing on bond prices across the market. Investors reduced their expectations for future Federal Reserve (Fed) rate cuts, with the stronger data alleviating investor concerns of near-term economic weakness.
Quick take: Real estate investment trusts (REITs) rose 0.2% last week, with gains in data center REITs offsetting declines in telecommunication and multi-family REITs. Global infrastructure returned 1.0.% while broad commodity indices gained nearly 3.9%.
Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio. Diversification and asset allocation do not guarantee returns or protect against losses.
Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy. Indexes shown are unmanaged and are not available for direct investment. The S&P 500 Index consists of 500 widely traded stocks that are considered to represent the performance of the U.S. stock market in general. The NASDAQ Composite Index is a market-capitalization weighted average of roughly 5,000 stocks that are electronically traded in the NASDAQ market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index and is representative of the U.S. small capitalization securities market. The MSCI EAFE Index includes approximately 1,000 companies representing the stock markets of 21 countries in Europe, Australasia and the Far East (EAFE). The MSCI Emerging Markets Index is designed to measure equity market performance in global emerging markets. The S&P Global Purchasing Managers' Index data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies. The Consumer Price Index is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is one of the most frequently used statistics for identifying periods of inflation or deflation. The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller.
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With the U.S. government’s authority to borrow money bumping up against the federally mandated debt limit this year, is a political confrontation brewing that could impact capital markets?
Persistently higher prices continue to weigh on consumers and policymakers alike.