Market Commentary May 2018

The second quarter of the year has begun in positive fashion following the sharp sell-off seen in Q1 with major global equity markets now in positive territory year-to-date, and within touching distance of their January highs. Investor confidence is being rebuilt and sanity has returned to the marketplace. Interest rate rises in the US have now been priced into market expectations and the 3% US Treasury bond yield level, which so phased investors last quarter, is no longer viewed with the same degree of foreboding. Indeed, rates can be said to be currently in a “Goldilocks” phase; not too high to discourage business activity, but just high enough to provide rising income to investors. That includes retirees, whose higher income can infuse further growth into consumer spending.