Led by solid gains in technology, energy, and smaller market capitalization healthcare stocks, U.S. equity markets pressed higher in May as investors shrugged off concerns that protectionism and inflation will dampen economic prospects. As has been the case throughout most of 2018, the higher growth information technology sector was the top performing industry group in the month and year to date. Fixed income portfolio returns were positive in the month and negative year to date due to rising interest rates, which negatively impact the price of fixed income securities. Global economic growth largely remains on solid footing, with real GDP projected to expand about +3.0 percent over the next couple of years. While solidly expansionary, the manufacturing PMI, a key leading economic indicator, has begun to moderate from historically high levels in a number of regions outside the United States. In contrast, macroeconomic indicators continue to suggest that U.S. GDP growth will accelerate into 2019, with the knock-on effects of fiscal policies delivering potential upside surprises. Moreover, widening global interest rate differentials as the Fed normalizes monetary policy may continue to exert upward pressure on the U.S. dollar in the intermediate term. We believe the U.S. economy is in the late acceleration phase of an expansion and view the likelihood of recession within the next 12 to 18 months as low. However, financial markets and the economy remain vulnerable to external shocks, including potential intensification of trade disputes into a global trade war, policy missteps by the Federal Reserve, and/or emerging market debt issues.