The markets in May. TPP strategy of the month..

The Markets in May

Markets extended their recovery in May, bouncing off April’s lows as consumer sentiment improved and trade tensions eased. Progress in US trade negotiations with the European Union and a temporary delay to planned tariff hikes reduced fears of a global recession and fuelled broad-based gains across risk assets.

The S&P 500 led global equity markets in May, having led the fall in March and April, advancing 6.3% amid a broad-based rally. The information technology sector outperformed, but the rally extended to cyclical sectors such as industrials and consumer discretionary. Year-to-date, the index has gained 1.1%, with May’s performance marking a significant rebound from earlier in the year.

The strong market performance was underpinned by a robust first quarter earnings season. With 97% of S&P 500 companies reporting, the blended year-over-year earnings growth rate was 12.4%. This marks the second consecutive quarter of double-digit earnings growth for the index. Notably, 77% of companies reported positive earnings surprises, and 63% exceeded revenue expectations.

European equities also performed strongly, with the MSCI Europe ex-UK Index up 4.9%. Advancements in US–EU trade talks helped to alleviate fears of recession, while expectations for fiscal support and upward earnings revisions continued to underpin regional sentiment.

The UK was the weakest major performing equity market, with the FTSE All-Share rising 4.1% in May. The FTSE 100 trailed with a rally of a little over 3%, but the fall in April wasn’t as severe as it was in the States due to the smaller impact of Trump’s tariff threats.

Consumer staples, healthcare and utilities were notable laggards. UK-listed pharmaceutical companies came under pressure following Trump’s drug pricing reforms, which threaten revenue from US sales. At the same time, persistent inflation and competitive pricing make it harder for staples to pass on rising input costs. Utilities also struggled, with rising UK bond yields reducing the relative attractiveness of dividend-paying stocks.

In contrast, global bond markets posted negative returns, with the Bloomberg Global Aggregate Index falling 0.4%. Rising fiscal concerns in the US — including Moody’s downgrade of its US sovereign credit rating and weak demand at long-dated Treasury auctions — triggered a mid-month sell-off in duration. Bond markets later recovered into month-end, as easing trade tensions and moderating inflation concerns restored some confidence.

Commodities were the worst performing asset class with the broad Bloomberg Commodities Index falling 0.6% over the month. Gold fell 0.8%, as improving risk appetite reduced demand for defensive assets. Industrial metals (+1.2%) and energy (+0.5%) posted positive returns. Oil prices recovered to almost $63 per barrel after falling to $60 mid-month, but traders remain focused on whether OPEC+¹ will follow through on recent signals of increased supply.

For TPP, it was a great month. A number of trading strategies got away with limited losses in April, meaning May returns counted twofold. Missing the drops but adding the gains is where TPP portfolios can stand out from the crowd.

Our trackers did, of course, track the market during the turmoil, but the more diversified portfolios are back on highs and having a great year. While most of our strategies traded well, there were a number of exceptional performances.

Cambridge Futures has controlled the volatility well as it's tasked to do. In March it returned 5.8%, it dropped only -1.1% in April, followed by a gain of 2.9% in May. This steady approach has meant that this strategy has been a stalwart for most TPP clients.

Our Long/Flat DAX Mirco strategy has performed very well throughout 2025. The DAX itself has kept afloat better than most indices this year, but not even the index has kept pace with TPP’s DAX trade. This strategy added on a whopping 15.8% in May, meaning it is now up 20.8% on the year for all its subscribers.

A new favourite, ‘FTSE Tech Entry’ has had a fantastic 2025 so far. Another 8.7% in May means that it is now up 23% year-to-date, and it blasted through its all-time highs on May 23^rd. This is going to take some beating this year, and we’re on in June. This strategy has a number of clients now and has kept up its incredible returns, boosting their portfolios as we hoped it would.

Of the trackers, both the Stoxx Europe 600, DAX and even the FTSE are on course for strong years posting gains of 10.10%, 8.10% and 6.70% respectively. It’s always good to have a mix of trackers for diversification and this is proving exceptionally true this year as the S&P 500 in the US has lagged behind.

Of our active strategies, American Alpha has once again delivered for clients. Designed for low drawdowns and consistency in any market climate, this trading strategy notched up 5.6% in May, having only dropped -1.2% in April.

It’s always good to see examples of how TPP can do things no other wealth manager can. By buying in and out of the market, we can create returns while the market is not. Have a mix of trackers, long/flats and our more active strategies, and your investment portfolio has the potential to consistently beat its market benchmark.

PLEASE CONTACT TPP FOR MORE INFORMATION

If you would like to find out how you can build a TPP portfolio to protect against current market conditions, please contact our Head of Trading here.

TPP uses professional traders and their trading strategies to actively manage your portfolio. That doesn’t mean we just move stocks around from time to time after the market has already moved like 90% of fund managers; we actively trade all portfolios, 24 hours a day, 5 days a week, with one goal in mind: to make you money.

It’s your hard-earned capital, don’t just leave it sitting with mediocre wealth managers, get the most out of your investments, contact TPP.

Disclaimer: The views expressed in this article are the author’s own and should not be considered in rendering any legal, business or financial advice. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions.

This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only.

Past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to the corresponding past performance.

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