The Markets – May 2012

Eurozoning out: Equities followed up on a disappointing April with a troubled May, the worst month for the Dow Industrials in two years and one that pushed the Global Dow into negative territory for the year. As problems in Europe mounted, more investors sought security in sovereign debt that seemed to offer at least some refuge from the difficulties of Greece and Spain. That demand pushed the yield on 10-year U.S. Treasury bonds to 1.63%–the lowest level seen in decades–while short-term German debt was auctioned with a coupon rate of zero.

Concern about the euro’s stability pushed its value from $1.32 at the beginning of the month to under $1.25. As the dollar strengthened, oil prices plummeted to roughly $87 a barrel from nearly $105 at the end of April, and gold lost roughly 7% to end the month around $1,563 an ounce.

*Equities data reflect price changes, not total return.