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An Alternative To Money Market Funds

May 2026

MARKET OVERVIEW
The US stock market continues to drive higher even as the battle in  Iran rages on. As of the close of trading on May 8, the Dow Jones Industrial Average is up 3.2% for 2026. Meanwhile the S&P 500 is up 8.08% and the Nasdaq is up 12.93% year to date. The impact has also been swiftly seen in the energy markets. Brent crude oil ended the week trading at over $100 per barrel.

Some items of note: E&J Gallo Winery acquired Four Roses Bourbon to expand its product offerings, Neurocrine has agreed to acquire Soleno Therapeutics for nearly $3 billion, a joint venture between Starbucks and Boyu Capital has been completed. It will focus on operations in China. Casey’s General Stores was added to the S&P 500 replacing Hologic, GoPro plans to
lay off nearly 25% of staff, Disney announced plans to eliminate 1,000 positions, Constellation Brands has withdrawn its guidance for its 2026 results due to uncertainty, Amazon & Globalstar announced they will combine in a nearly $12 billion deal, Apple is closing its first unionized shop in Towson, MD and convenience store chain 7-11 announce plans to close hundreds of stores.
Meanwhile, long time New York Yankees baseball announcer John Sterling and the flamboyant businessman Ted Turner, both passed away earlier this month.

ECONOMIC SUMMARY
Friday’s Nonfarm Payroll report was much stronger than expected as 115,000 jobs were added. The Labor Participation Rate dipped slightly to 61.8% while the U-6 Unemployment rate rose slightly to 8.2%. The next unemployment report will be released on June 5.

FEDERAL RESERVE
The next Federal Reserve meeting will be held June 16-17. President Trump’s pick Kevin Warsh to be the next Chairman of the Federal Reserve, awaits confirmation by the US Senate. He will likely host his first meeting as Fed Chairman at this meeting. Jerome Powell’s term is set to end on May 15.

STOCKS TO WATCH
Despite the strong performance of the stock market, one cannot help but notice the enormous  amount of discounting being offered by fast food chains and restaurants. Recent examples now on offer include McDonald’s $4 breakfast meal deal, 50% off all pizzas at Domino’s, $10 pizzas at Pizza Hut, all you can eat shrimp at Red Lobster et al.

Clearly, these companies are not doing this out of the goodness of their hearts. Rather, this is a clear sign of a stretched consumer, especially at the lower end. Now that significant job cuts are being announced in America, it is only a matter of time before the US stock market takes a turn lower. Commodity prices, especially in the energy sector are definitely having a negative impact on consumer spending. Regular gasoline is now selling at well over $4 per gallon.

My weekly radio show is now on holiday and should return soon on WWPR 1490 AM. My prior radio shows and columns are available here.

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