Ongoing Middle East peace negotiations, NVDA earnings, SPCX IPO anticipation, sticky rates, volatile oil and seasonality conspired this week to create a de-risking environment where daily price movements of individual securities became harder to forecast.
Sell in May
As Q1 earnings season starts trailing off, the liquidity drain of seasonality de-risking into the summer is contributing to the near-term headwinds.
We have heard anecdotal stories of the markets starting to behave a bit erratically over the past several trading sessions.
Early monthly gains are starting to dissipate across fundamental strategies while quant strategies are having a mixed experience.
Global Markets & Economic Data
- US: US Housing data (NAHB Housing Market Index) ticked slightly higher in May versus April as Pending Home Sales were higher than expected, but 30-year mortgage rates just moved back above 6.5%.
- Switzerland/UK/Europe: Swiss Industrial Production fell in Q1 following a revised downward Q4 ’25 print. UK Unemployment hit 5% and inflation is running at 2.8%. German Consumer Confidence ticked up versus the previous reading, but remains near the lowest level since mid-2023.
- China/Japan: Chinese Industrial Production and Retail Sales data were both far below forecast. Japan’s Q1 GDP growth is running at a 0.5% Q/Q rate.
Index Returns Summary
- MSCI World: 1.74% MTD · 7.57% YTD
- MSCI Asia Pacific: 1.47% MTD · 11.66% YTD
- MSCI Europe: -1.48% MTD · 2.91% YTD
- Bloomberg Barclays Global Aggregate Index: 0.75% MTD · 0.92% YTD
- Bloomberg Commodities Index: 0.28% MTD · 28.47% YTD
- HFRX Global: 0.86% MTD · 3.25% YTD
- HFRX Macro/CTA: 1.62% MTD · 6.05% YTD
- HFRX Equity Hedge: 1.18% MTD · 5.05% YTD
Index data as of May 15, 2026