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Daily Capital

May Market Recap: Pre-Summer Lull Amidst Lingering Concerns

With COVID-19 social restrictions easing and the weather warming, many shifted their focus toward looking forward to a more normal summer. Likely for this reason, along with an absence of major news on new stimulus or tax measures, markets were relatively calm in May. Most major equity and bond indexes remained in a narrow range for the month.

‘Transitory’ Inflation and U.S. Tax Plans

The prospect of sustained inflation has become a hot topic for investors who continue to crave easy money but are increasingly aware of the potential consequences. The Fed continues to view inflation signs as transitory, suggesting more accommodative monetary policy for now. Meanwhile, President Joe Biden’s proposed spending plans and tax increases are facing increased resistance in Congress, increasing the likelihood they are moderated before passage.

Emerging Markets on the Rise

Emerging markets stocks moved higher as investors applauded indications China will seek to contain commodity inflation. Even so, commodities in general advanced for the month with oil approaching a three-year high.

Crypto Loses Steam

Cryptocurrencies and Bitcoin, which began the month enjoying euphoric enthusiasm, lost momentum. Bitcoin shed about a third of its value while other coins fared even worse. We do not believe this correction means much either way for the future of Bitcoin and crypto. For some, it was a good reminder that these assets are volatile and will continue to experience big moves both up and down.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.
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