Welcome back to the Monthly Market Wrap from YCharts, where we break down the most important trends for advisors and their clients in this monthly market review. As always, feel free to download and share any visuals with clients and colleagues, or on social media.
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May 2023 Market Summary
May was a mixed month for stocks as the NASDAQ surged, the S&P remained about flat, and the Dow Jones Industrial Average took a hit. The NASDAQ advanced 5.9% in May largely thanks to stellar gains in the semiconductor space, notably by NVIDIA (NVDA), Advanced Micro Devices (AMD), and Broadcom (AVGO). The S&P 500 rose 0.4%, while the Dow Jones Industrial Average lost 3.2%. It was a down month around the world–Emerging Markets slipped 1.7%, and Developed Markets sank 4.1%.
Unemployment increased by 0.3 percentage points to 3.7% in May one month after retreating back to its lowest level since 1969 (3.4%). Inflation remained essentially unchanged MoM, and the Federal Reserve issued its 10th consecutive rate hike at the start of the month, bringing the Fed Funds Rate to 5.25%. Oil was down over 6.5% in May, bringing both WTI and Brent down over 41% from their highs last year.
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Off the YCharts! The Newest $1T Club Member
On May 30th, a new member was welcomed into the $1 Trillion Market Cap Club™: NVIDIA (NVDA). Although its club membership was brief, the chipmaker has surged a whopping 167% YTD. If NVIDIA maintains its momentum with another quarter of strong earnings and solid forward-looking guidance, its market cap should be back above $1T soon enough.
Here’s a look at how the seven past and present members of the $1 Trillion Market Cap Club are currently doing:
US Inflation was virtually unchanged in April at 4.93%, as was US Core Inflation at 5.52%. Both inflation readings came in less than one-tenth of a percent lower than the previous month. The US Consumer Price Index rose 0.37% in April, and US Personal Spending increased 0.84% MoM. The Federal Reserve hiked the Target Federal Funds Rate by 25 bps at its May 3rd FOMC meeting, bringing it to 5.25%. The Fed Funds rate has now been hiked 500 basis points since the first rate hike 14 months ago on March 16th, 2022.
The price of gold spent the first half of May above $2,000 but ended the month at $1,962.77, down slightly MoM. Oil prices took a breather; the price of WTI per barrel dipped 6.5% to $71.81 and Brent sank 6.8% to $75.77. Both types of crude oil are down over 41% from their highs set in March of 2022. May’s decline in oil prices translated into three cents off the average price of regular gas, to $3.78 per gallon at the end of May.
The crypto bull run took a pause in May as the price of Bitcoin fell 7.6%, while Ethereum slipped 1.9%. Nonetheless, crypto has enjoyed a remarkable start to 2023. Bitcoin is up 63.7% YTD, and Ethereum is 56.0% higher. May was the first down month for Bitcoin and Ethereum so far in 2023.