A ‘sell in May’ strategy would have proven to be a premature move for global equity investors, with subdued volatility and positive earnings momentum helping a number of headline indices reach fresh new highs in the month.
- In developed markets, UK equity returns led the way, with sterling weakness linked to the polls narrowing ahead of June’s UK general election – supportive of the strong performance of defensive UK large-cap stocks
- European equities also continued their strong run in May, as Emmanuel Macron’s comprehensive victory in the French presidential election removed more of the political uncertainty that had been overshadowing the signals of an economic recovery on the continent
- In currency markets, the Macron result also helped the euro strengthen further against a number of major currencies. The latest scandals and investigations into President Donald Trump saw the US dollar weaken, which supported both gold and US Treasuries. Despite dollar weakness in May, commodity prices continued to be volatile, in particular oil prices, where oversupply fears outweighed the OPEC agreement to extend production cuts into 2018
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