“Skate to where the puck is going, not where it has been.”
–Wayne Gretzky, NHL Hockey Hall of Famer
Volume 29
Powerplay: Global Markets Strike While US Holds Defense
What Happened in the Markets
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Picture this month’s market landscape as a well-executed powerplay in a hockey game (we all knew I’d eventually go there): the puck spends more time in the offensive zone, opportunities materialize out of seemingly thin air, and suddenly you’ve got pucks sliding by the goalie faster than you can react. In June, global equities took center ice, US stocks played best defense, and the tariff skirmish quietly shifted benches. Let’s break down the playbook—and I promise to bring it right back to that powerplay by the final buzzer. Let’s talk about what’s fueling those gusts.
For years, tilting toward non-US equities often felt like chasing rebounds—rewarding when it happened, but more often a frustrating scramble. Yet as of May 31, the MSCI All Cap World Ex US Index has sprinted ahead, delivering a 14.0% gain year-to-date, with developed markets such as EAFE up 16.9% and emerging markets at 8.7%—all while the S&P 500 has only eked out a 1.1% rise. This surge has largely been driven by a weakening US dollar (down nearly 9% this calendar year, bottoming out at levels not seen since mid-2022), fueling currency tailwinds for US investors in global equities. As Atlas’s CIO, I’ve implemented a more balanced US-International mix, reducing our long-standing US overweight to neutral, so we’re positioned to capitalize on what appears to be an extended period of strength for non-US stocks. We made these moves back in the first quarter.
“Sell in May” may be the old refrain, but May 2025 refused to listen. With a 6% gain in the S&P 500 (the best May performance in 35 years), US equities have shown impressive resilience. Historical data suggest that after a 5% monthly gain, the following 12 months typically yield an average return of more than 13%. Notably, June often extends those gains by an average of 1.2%, compared to the 0.7% norm. While headline US strength matters less for our allocation pivot, it is reassuring that sentiment—once bearish—has flipped, ripe for bullish follow-through. After 15 consecutive weeks of more bears than bulls, the AAII survey finally showed bulls in the driver’s seat, a setup that historically precedes double-digit returns. We’ll keep our US allocation trim, but we’re mindful that the puck still finds the back of the net when broad sentiment turns.
As the chart on the next page illustrates, headline tariffs ramped from 10% in mid-February to 25% on steel and aluminum in early March, then spiked as high as 41% on select Chinese imports by mid-April—before the US Court of International Trade hit the brakes with the “Liberation Day” ruling in late May. That decision rolled headline rates back toward an effective 7% average (albeit leaving steel and aluminum in place), and forces the Administration to regroup under Section 122, 301, or 232 authorities if it wants to reimpose broader levies. Initial market reactions were rapid: small-caps popped 3% overnight and S&P futures surged higher (before settling back), but the ruling also extends the trade-policy fog. From our vantage point, we remain overweight in industrials and materials, since protracted tariff ambiguity tends to pressure margins and fuel input inflation, while underweighting tech names that could face supply-chain headwinds. The partial reprieve eases near-term risk, but we’ll keep our scanners on for any procedural appeals or fresh tariff skirmishes.
In light of these developments:
Just like a crisp saucer pass on a powerplay that catches the defense flat-footed, global markets have capitalized on the fleeting weakness of US equities, and bull sentiment is riding high after May’s breakout. Meanwhile, the tariff ruling forced both sides to regroup behind the blue line, reminding us that even the best-laid plans must adapt to unexpected shifts. As we head into June, our strategy is to maintain momentum—balancing our roster across geographies, sectors, and asset classes—so that when the tide shifts, we’re positioned to capitalize on every scoring opportunity.
Thank you for trusting Atlas with your asset allocation playbook. As always, our goal is to keep the puck in the offensive zone, where opportunities are ripe, risks are managed, and you’re set up to score over the long haul.
Stay sharp out there—just like on the ice, positioning matters, but hustle wins the game.
May delivered another “riskon” surge. US large-caps led with 6.3%, while mid-caps and small-caps each notched 5.3%, signaling broad buying beyond just mega-caps. Equity breadth was strong: more sectors participated, from tech to industrials, suggesting robust underlying market health. International equities also rallied— developed markets 4.7%, emerging 3.8%—propelled by a 2% drop in the US dollar as global growth optimism outpaced US economic concerns.
On the fixed income side, higher rates weighed on core bonds: Treasuries fell −1.0% and AGG −0.7% as 10-year yields climbed on stickier inflation prints and a still data dependent Fed. Credit sectors outperformed: bank loans returned 1.4% and high-yield 1.7% as spreads tightened modestly amid healthy demand for income in a rising-rate backdrop.
Positioning into June: We remain tactically overweight equities (neutral US/overweight international), modestly underweight duration, and favor spread-income products (bank loans, highyield) to capture carry while controlling rate sensitivity.
As the Chief Investment Officer, Stephen Swensen oversees investment management, research, portfolio design, and all investment-related operations at Atlas. He also chairs the Atlas Investment Committee, guiding strategic investment decisions.
Stephen’s career began as a Financial Analyst for Deseret Mutual Benefits Administration (DMBA), a role in which he managed investments for a private pension fund and insurance company. Subsequently, he served as an investment analyst and portfolio manager for local Registered Investment Advisors (RIAs). Before joining Atlas, Stephen contributed his expertise as an Outsourced Chief Investment Officer (OCIO) for the Carson Group, supporting advisors on the West Coast. Educationally, Stephen holds an MBA and an MS in Investment Management and Financial Analysis from Creighton University. He has earned the Series 65 Uniform Investment Advisor License and is actively pursuing the prestigious
Chartered Financial Analyst (CFA) designation.
Beyond his professional achievements, Stephen is an enthusiastic hockey fan, both on and off the ice. He finds joy in playing the piano, golfing, reading, and outdoor cooking. However, his greatest source of happiness comes from spending quality time with his wife and four children
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