May 2016 Market Update

Our monthly market updates are designed to keep clients and members of the community abreast of market movements, macroeconomic and geopolitical issues and Callan Capital portfolio positioning. We encourage and welcome your feedback. 

Global financial markets are in better shape than they were a few months ago – confidence in the economy is growing, oil prices are stabilizing, fears over the Chinese economy are receding and credit spreads are narrowing. The month of May was relatively neutral; the S&P 500 was up 1.80%, while the FTSE All World Ex-US was down -1.51%. Year-to-date through May, the S&P 500 returned 3.57% and the FTSE All World Ex-US returned 0.78%. Investors remain jittery due to short-term risks like an uncertain geopolitical backdrop and a potential raise in rates.

At the last Fed meeting, Chair Janet Yellen stated that if positive data holds, the Fed is looking at a rate increase in the next few months. The latest economic report shows that the economy grew by 0.8% during the first three months of the year. Last Friday’s jobs report showed that the economy created 38,000 new jobs in May, one of the worst months since 2010[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][1]. Seasonal factors and a Verizon workers strike affected the number, which came in much below expectations. However, despite the low report, the unemployment rate fell to 4.7%, the lowest since 2007, due to a shrinking labor force. We do not believe that a weak May jobs report is enough to signal the beginning of a major slowdown. Other economic indicators like housing, GDP, retail sales and personal spending are all positive.

The beginning of 2016 is a reminder of the importance of a long-term perspective and a diversified portfolio, especially since we believe volatility will remain throughout the year. If you are a client and would like further detail on these topics or anything else, please don’t hesitate to call or email us. If you are not a client, but would like more information on Callan Capital’s wealth management services, please contact us at (858) 551-3800 or visit www.callancapital.com.

 *Past performance does not guarantee future results, which may vary. This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. For more information regarding Callan Capital, please refer to our most recent Form ADV Part 2A which may be found at adviserinfo.sec.gov.

S&P 500®: Standard & Poor’s (S&P) 500® Index. The S&P 500® Index is an unmanaged, capitalization – weighted index designed to measure the performance of the broad US economy through changes in the aggregate market value of 500 stocks representing all major industries.

The FTSE All-World ex US Index comprises Large and Mid cap stocks providing coverage of Developed and Emerging Markets excluding the US. The index is derived from the FTSE Global Equity Index Series (GEIS), which covers 98% of the world’s investable market capitalization.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

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