May Market Commentary

June 21, 2023

AI mania gripped the market as significant gains among the large technology names propelled the S&P 500 higher during the three months ended 5/31. Other stock sectors struggled. Economically sensitive small cap stocks declined, as recession fears have not dissipated. The collapse of several banks dented confidence, although the situation seemed to have stabilized by May. Pessimism over the global economy was greeted favorably by bond investors, and prices rose.

Commercial real estate continues to be battered by woes in the office sector. The overbuilding of apartments is a looming issue as well. Cutbacks by Saudi Arabia failed to raise prices for oil. Chinese demand has failed to take off following the abandonment of zero-covid.

As inflation moderated, investors have become more optimistic that monetary policy will loosen in the near future.