Global stocks eked out a gain of 0.4% in May, with U.S. stocks pulling all of the weight. U.S. small stocks were the top performer – gaining 6.1%! Results were mixed among bonds, but U.S. bonds managed marginal, positive returns. Despite continued global growth, stock and bond markets have had trouble gaining traction in 2018, resulting in mostly flat returns. 


  • The second estimate of first quarter real GDP growth was revised down to an annualized rate of 2.2% – down from the fourth quarter rate of 2.9%. However, the first quarter has been a bit of an anomaly in recent years – frequently posting more sluggish growth than the rest of each year.
  • Inflation (CPI) ticked up slightly, although still rounding to a 2.4% gain over last year’s data. The Fed appears to welcome a modest overshoot of its 2% goal, given years of shortfall.
  • The unemployment rate continued its fall and now sits at 3.8% – a figure that has not been bested since 1969!


  • The S&P 500 gained 2.4% in May, but U.S. small cap (+6.1%) and U.S. small value stocks (+4.7%) posted even stronger gains.
  • Flipping the script from April, international stocks were the weakest performers. Specifically, international large value (-4.3%) and emerging markets (-3.5%) were a drag on performance.


  • Geopolitical concerns overseas increased interest in U.S. bonds while putting some pressure on international bonds (-0.1%).
  • The increased interest drove yields on U.S. bonds lower, prompting gains in short-term (+0.2%) and intermediate-term bonds (+0.6%), as well as TIPS (+0.4%).


  • Global REITs (+2.2%), commodities (+1.4%), and reinsurance (+0.6%) continued to post gains in May, while managed futures (-1.1%) were stifled by prices whipsawing in several global markets.

Read our complete May 2018 Economic & Market Commentary for Market Returns Year-To-Date, Market Returns Longer Term Annualized, Economic Indicators, and an Appendix.

Sources: Bureau of Economic Analysis (BEA), Federal Reserve, Morningstar Direct, Standard and Poor’s, JP Morgan. 

This is intended for informational purposes only and should not be construed as legal, investment or financial advice. Please consult your legal, investment and financial professionals regarding your specific circumstances.

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