If I could save time in a bottle, The first thing that I’d like to do Is to save every day, Jim Croce time in a bottle

Another month comes to a close, one that has seen a notable rally in global stock markets, with the technology and consumer discretionary sectors leading the rally. In contrast, the more defensive sectors of healthcare and non-discretionary spending lagged the broader market. Healthcare remains deeply out of favour with the investment community, with many global healthcare companies now trading on close to single-digit Price-to-Earnings (P/E) Ratios, offering healthy dividend yields. Concerns surrounding patent expiries and the allure of companies like Microsoft have left the sector deeply unloved.

 In sterling, the MSCI World Index is up over 4%% in May, and the FTSE All Share is up around the same, putting the All Share now in mildly positive territory for the year.  In dollars, the MSCI World Index has largely recovered from its losses, but in sterling terms, due to the dollar’s weakness, it remains down by just over 5%. The S&P 500 is also almost flat for the year in local currency; however, for a sterling investor, it is down by approximately 10%. One can see the impact, both positive and negative, that currency can have on performance, depending on the currency in which you report. For those who like to sell in May, this rally has provided them with plenty of opportunities.

The news that the court had ruled Trump’s use of tariffs illegal, as they were judged to exceed the president’s legal authority under the International Emergency Economic Powers Act (IEEPA), gave stock futures a boost on Wednesday night, along with another set of decent figures from Nvidia. However, in the cold light of day, most of the rally fizzled out. Nonetheless, the S&P 500 did manage to hold onto some modest gains yesterday. Later on Thursday, the appeals court paused the ruling. Trump’s economic strategy is largely based on his executive power; one must wonder if that is now in question.

We are now entering the quieter summer months, which can lead to a period of greater volatility as liquidity remains low, and any news flow can move markets more easily, both positively and negatively. Bond speculators were anticipating that the Federal Reserve would cut in June, but that optimism has waned in the past weeks. Traders now expect just two cuts in rates this year. The minutes from the May Fed meeting were released last night. The tone of the meeting appears to be one of concern that inflation remains elevated, and unemployment is increasing —a not-so-pleasant mix for central bankers to deal with. Should that persist as they face the difficult task of controlling inflation and supporting economic growth, they are not alone with that problem. Mr Bailey can surely feel their pain. Two-year treasury yields have steadily been rising in May, indicating the expectations of the market for a June cut waning.