Market Update
May proved to be one of the best months for stocks in quite some time. The month got off to a good start on the heels of strong corporate earnings data and a solid jobs report. May also brought some progress in the U.S.-China trade war, with an agreement for a 90-day reduction in tariffs while the parties continued talks aimed at a trade resolution. However, at the end of the month, President Trump accused China of breaching their recent trade deal. Middle East investment deals also helped push tech shares higher.
Nine of the 11 market sectors ended May with gains, led by information technology, communication services, and consumer discretionary. Health care and energy closed in the red. The latest inflation data was encouraging; however, it did not reflect the potential impact of global reciprocal tariffs, nor has it reached the Federal Reserve's 2.0% inflation objective. In light of the potential impact of tariffs, it is likely that the Federal Reserve will maintain a cautious approach as it continues to assess the balance of risks to the economy.
International Markets
Investors spent the month of May digesting plenty of economic data, particularly with respect to the impact of tariffs on international trade. German retail sales declined for the first time in four months after falling 1.1% in April. However, the German Consumer Price Index held steady at 2.1% in May. Despite the imposition of tariffs, inflation eased in Italy, Spain, and France, boosting expectations of an interest rate cut by the European Central Bank when it meets in early June. China's first-quarter 2025 GDP grew 1.2%, down from a 1.6% increase in the fourth quarter. In addition, China's consumer prices fell for the third straight month in April and were down 0.1% from April 2024. In May, the STOXX Europe 600 Index rose 2.3%; the United Kingdom's FTSE gained 2.1%; Japan's Nikkei 225 Index gained 3.1%; and China's Shanghai Composite Index ticked up 2.1%.
On a Personal Note
Jeff and Peggy spent a long weekend in Denver visiting their son Braden. They helped him make Burgoo for his Kentucky Derby party. In May, Drew's oldest daughter graduated high school. She is headed to Auburn University in the fall where she will be in the honors college and plans to double major in business and psychology. War Eagle! Chris and his family mostly finished up their spring sports and the school year, and now they are ready for summer! Lisa and her family jointed the Cincinnati Nature Center last month. They've already been on quite a few hikes at both the Rowe Woods and the Long Branch Farm & Trails locations. Sam went to his first Reds game of the year in May. Seeing Tito coach reminded him of all the Indians games he used to go to in high school. Taylor has kept busy between returning to work, parenting, and spending time with family. These days, she is EXTRA caffeinated!
