On the last trading day of May, DoubleLine Portfolio Manager Eric Dhall and Macro Asset Allocation Strategist Ryan Kimmel review a month that saw a few tech giants (0:41) drive the S&P 500 to new highs while bond yields eased (5:56) albeit to still elevated levels versus the start of the month. Commodities (10:53) declined, led by energy. These moves came amid a ping pong of headlines fueling both hopes for a détente in the Persian Gulf and fears over the precarity of the ceasefire between the U.S. and Iran. “The U.S. is negotiating with some more moderate people in Iran, but the guys with the guns don’t necessarily agree with those moderates,” Eric Dhall notes. “It’s tough to believe that this situation is going to blow over until we start seeing ships transiting through Strait of Hormuz.”

On the macro front for the week (13:27), Ryan Kimmel notes that despite softer-than-expected readings on the PCE Deflator for April, inflation still “is not moving in the right direction and remains well above the Fed’s targets.” Looking inside the personal income report for April, he notes real wages and salary growth turned negative. For the week ahead, the biggest item will be the Bureau of Labor Statistics’ payroll and unemployment reports for May.