A relatively weak month for the financial markets has passed against the background of good data  on economic activity. As a recovery from the pandemic is emerging, fear of continuous inflation is growing, which is expected to prompt central banks to intervene in order to avoid overheating the economy. The broad US S&P500 index remained virtually unchanged in May, while the NASDAQ technology index fell with -1.5% for the month. In Europe, the indices rose, supported by prospects for recovery after the acceleration of vaccination.
 

In the United States, the focus over the past month has been on growth and inflation. The Managerial Procurement Index (PMI) reported a higher-than-expected value, showing rising costs for raw materials and resources. The companies included in US S&P 500 index reported a 47% increase in profits for the first quarter of the year with an estimated 20% growth. Inflation of 4.2% in April on an annual basis was also higher than the forecast. These trends are increasingly drawing attention to the actions of the US Federal Reserve (Fed).
 

In Europe, PMI has reached its highest value in two years, thanks to the services component. The European Union Reconstruction Fund has already been fully ratified and the first payments are expected to begin in the summer.
 

China's producer price index rose the most in three years, negatively affecting global inflation. In April, the index rose 6.8%, after rising 4.4% a month earlier, driven by rising commodity prices and the low-level effect of last year. It is reassuring that credit activity in China is weakening, which should limit growth.
 

In the coming months, the main topic will continue to be the pace of economic growth following the easing of measures to tackle the pandemic. The effect of inflation and central bank action will be key to financial markets. After the strong start of the year for the stock markets, the indices have already reached the forecasts of some of the investment banks for the end of the year. However, sentiment remains positive, but it seems likely that by the end of the year we will see increased volatility and adjustments.
 

Compass Global Trends Performance
Compass Global Trends ended the month with a share price of BGN 1.5057, which is a decrease of -1.81% for the month and an increase of 2.01% compared to the beginning of the year.

Price per unit of the fund for the period from April 1, 2014. until May 31, 2021.

 

Compass Euroselect Performance
Compass Euroselect ended the month with a share price of EUR 1.0440, which is an increase of 2.28% for the month and 4.34% compared to the beginning of the year.

Price for one unit of the fund for the period from July 16, 2018. until May 31, 2021.


For more detailed information about the performance of Compass Global Trends and Compass Euroselect in May and about the development of global financial markets and management expectations HERE.(BG)