Government bond yields were little changed in May. US investment grade corporate bonds produced a solid total return and continued outperforming Treasuries. High yield corporate bonds saw further positive returns, driven by coupon-clipping as spreads slightly widened
US equities rose in May. Economic momentum showed further signs of acceleration as industries reopened and vaccine roll-outs continued, which lifted investor spirits. The composite purchasing managers' index (PMI) rose to 63.5 in April, indicating significant expansion. Driven by the services component, this suggests the services recovery is now underway. The PMI is an index of business activity based on a survey of private companies in the manufacturing and services sectors. A reading above 50 means the economy is expanding.