Adam Phillips 

So much for sell in May and go away. Uh, that's the old Wall Street adage, and it says that the period from May to October is usually a pretty ugly month for investors, at least compared to November. To April. But that didn't actually work out. Uh, at least not yet. I. Not so far. May was actually a really strong month. 

We saw the s and p 500 gain 6%. That was the best return in the month of May since 1990. So now we're trading just within 4% of the all-time high. And what really drove a lot of the strength in May, uh, was the trade truce, uh, between the US and China. A really strong reporting earnings, uh, or earnings reporting season that came in a lot stronger than expected. 

I think the question now is, where do we go from here? And, I think it's really interesting. Over the last couple of days, we're seeing a little bit of tension, uh, start to creep back in between the US and China, on both sides. Uh, appearing to claim that the other isn't negotiating in good faith. So we'll see [00:01:00] if, uh, where we go from here. 

I think one of the interesting pieces of information last week, as it relates to tariffs, was, uh, a court ruling. I. This was from the Court of International Trade, and they actually said that the, uh, President Trump's tariffs, uh, that he announced the 10% Universal tariff, uh, by using the International Emergency Economic Powers Act. 

And that's a mouthful. We really just call it IEPA. Uh, they said that that's actually, uh, that those aren't valid. But he was very quick to appeal that decision. Within 24 hours, we saw the appeals court actually stay that ruling. And so the tariffs for now remain back in play. Uh, but the question is, where do we go from here? 

I think it's going to be really interesting. We do know that President Trump is not going to let up on this, uh, very easily. Tariffs are, are a big part of his, uh, of his policy approach, but I think what it does is just add to this uncertainty. We know that we, uncertainty has been one of the key themes so far this year, and [00:02:00] it's not going away anytime soon. 

And so even though the markets have recovered to within 4% of their all-time high. We do expect this uncertainty to keep businesses and consumers on edge here in the months to come. I think that the timing of the court ruling is, is very interesting. What we've seen, maybe no surprise to some, is that tariff revenues coming into the government are skyrocketing. 

In the month of May, we saw about $23 billion in government receipts, uh, from tariffs. That is up almost threefold from a year before. And so as we think about it, part of, uh, the administration's plan is to use tariff revenue to help offset a lot of the new spending that's coming from the big beautiful bill. 

Um, so this, uh, this, this legislation, the extended, uh, tax cuts that President Trump is trying to push through. So, to the extent that tariffs are actually challenged, what does that do? For the future of this, uh, [00:03:00] of the big beautiful bill. Right now, the Senate is actually coming back into session this week. 

They're going to talk about it now that the house has passed, uh, the bill, uh, through reconciliation. They're gonna start talking about it. But if tariffs are suddenly a question mark. What does that do, uh, especially for those in the Senate who are really concerned about the level of debt and the growing deficit in the country? 

So I think this is really, uh, an interesting, uh, time for these decisions. It's something for us to keep an eye on here as we look to this week. I mentioned the Senate, uh, that's going to begin negotiating on the big beautiful bill. The other, uh, key data point that we're watching is on Friday. 

That's the jobs report. This is going to be really interesting, as we know, uh, as, as, uh, as goes the jobs market, so goes the consumer and consumer spending, which really is the engine for the economy. We are starting to see some cracks in the labor market, and so when, on this coming Friday, we'll really be interested to see where the unemployment rate is, does it tick higher from its current rate of 4.2%? 

We [00:04:00] are seeing. Some beginning signs of stress start to show up in the labor market. One example of this is in continuing jobless claims. This is a weekly indicator that we get this number is quickly approaching 2 million. Now, although initial claims, meaning those that are filing for first-time benefits, remain relatively low, that suggests that layoffs are still relatively muted. 

The fact that continuing claims indicate those that are still continue to file for unemployment benefits suggests that the rate of hiring is falling. So, layoffs aren't necessarily spiking, but companies aren't too eager to go out and hire. So if you're, if you're out of a job, you're in a really tough spot. And so this could be an early warning sign of some economic stress, perhaps some pressure on the job market. 

And I think that's why this jobs report, this coming Friday, is going to be really important for all of us to watch. Um, but that's it, uh, for this week. If you have any questions, please uh feel free to reach out to your advisor. Otherwise, we'll have plenty to talk about next week. I look forward to seeing you [00:05:00] then. 

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