Market Note
Continue buying
Sentiment remains ebullient as investors are determined to maintain the positive momentum in risk assets, which has sent the Russell 2000 index up 7% in just the past six trading sessions and is now up 22% from the March 30th YTD lows.
The Familiar CY Arc
Here we are again. We just experienced the spring, Trump-action induced market swoon followed by a swift, nearly miraculous re-risking in its wake.
Looking ahead, based upon previous Trump presidential years, we have a smooth upward trend over the summer with a bit of turbulence in the fall that will ultimately be resolved in a year-end rally.
Thankfully, hedge fund performance has a good head start in 2026 compared to some previous Trump years when the Spring meat grinder left hedge fund performance lagging, which led to a reliance on big returns in H2 to meet CY HF portfolio return expectations.
Hopefully the embedded YTD HF PNL will be preserved through the summer malaise and not squandered from complacency in noisy thinly traded price action.
Global Markets & Economic Data
- US: Crude stockpiles fell by 2.8mm barrels last week but have risen by 22mm barrels YTD. April Consumer Spending rose 0.5% m/m with increased energy spending contributing, but other categories like food & beverages, nondurable goods, recreational goods, and vehicles are seeing a surprising uptick.
- Switzerland/UK/Europe: Swiss KOF Leading Indicators ticked up slightly in April, in-line with expectations. UK Retail Sales were flat y/y in April, below forecasts. EU sentiment rose slightly m/m but remains close to five-year lows.
- Japan/China: The Japanese Unemployment rate fell to 2.5% as the number of unemployed hit an eight-month low. Chinese FDI fell 10.3% y/y in April, a deeper drop than anticipated.
Index Returns Summary
| Asset Class | MTD | YTD |
|---|---|---|
| MSCI World | 3.21% | 9.04% |
| MSCI Asia Pacific | 2.26% | 12.45% |
| MSCI Europe | 1.95% | 6.34% |
| Bloomberg Barclays Global Aggregate Index | -0.47% | -0.30% |
| Bloomberg Commodities Index | -1.32% | 26.87% |
| HFRX Global | 1.66% | 4.05% |
| HFRX Macro/CTA | 2.29% | 6.72% |
| HFRX Equity Hedge | 2.64% | 6.51% |
*Index data as of May 22, 2026
Disclaimer: This material has been prepared by MASTERPIECE ADVISORS for informational purposes only and should not be construed as financial advice. Investments in hedge funds are speculative and involve a high degree of risk. This material is confidential and may not be disclosed without the express written approval of MASTERPIECE ADVISORS.