Did You Sell In May?

May-hem: Small Caps Surge Most Since US Election As Crypto, Credit, & The Yield Curve Crash

It all started off quite calmly and then…

Or put another way…

May was quite a month. Here’s the high- (and low-) lights…

  • All major US Equity indices rose in May
  • Small Caps surged over 6% – best month since Nov 2016 (US election)
  • General Motors best month since Oct 2015 (thanks to Softbank)

  • All thanks to biggest short squeeze since Nov 2016 (US election)

  • S&P Financial stocks dropped for the 4th straight month – longest losing streak since Sept 2011
  • European Bank stocks worst month since June 2016 (Brexit) – lowest close since Nov 2016

  • Italian 2Y Yields biggest absolute monthly spike since Nov 2011
  • Italian 10Y Yields biggest absolute monthly spike in history

  • 2Y TSY Yield’s biggest monthly plunge since June 2016 (Brexit) – the first monthly yield compression since Aug 2017
  • 10Y TSY Yield’s biggest monthly drop since Aug 2017

  • US 2s10s Spread tumbled to flattest since Sept 2007
  • US 2s30s Spread tumbled to flattest since Aug 2007 (flatter for 15 of the last 18 months)

  • US HY Credit Risk biggest spread widening since Aug 2017

  • The Dollar Index surged to its best month since Nov 2016 (US election)

  • Euro and Cable were the worst performers…

  • Cryptocurrencies ugly for 3rd of last 5 months

  • WTI dropped for only the 2nd month in the last 9 months
  • Gold fell for 3rd of last 4 months – lowest since Nov 2017
  • Silver rose 0.75% in May – its first monthly gain since January

May saw the best combined stock and bond performance since Feb 2017…

Finally, May was an ugly month for US macro data and the Fed balance sheet…

*  *  *

The holiday-shortened week has been volatile in equity-land as Italy fears faded, replaced by Spanish panic and trade turmoil…

The S&P broke below its 100DMA…

 

European VIX remains above US VIX for now…

 

Italian banks managed some late gains with BMPS now green for the week…

 

But US banks continues to fade…

 

FANG stocks continues to rally…

 

Treasury yields continues to slide today – apart from the 2Y which ended modestly higher…

 

 

 

The Dollar Index rallied after Trump’s tariffs headlines pushing back to unchanged for the week…

 

Cryptocurrencies managed modest gains today back to unchanged on the week…

 

All commodities are back in the red for the week now…

 

We leave you with the following…

And this…

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