General Market Review
In May 2026, U.S. equity markets continued their upward trajectory, although momentum moderated compared to the sharp rebound seen in April. Market performance was supported by resilient corporate earnings, easing geopolitical concerns, and growing expectations that monetary policy may gradually become less restrictive.
Geopolitical tensions in the Middle East remained contained following the ceasefire agreement reached in April, contributing to improved investor sentiment. Oil prices stabilized after the sharp decline observed in the previous month, reducing pressure on inflation expectations and supporting equity valuations. At the same time, optimism around artificial intelligence and technology-driven growth continued to underpin market performance, particularly within large-cap technology stocks.
The first quarter earnings season extended into May with generally positive results. A majority of companies continued to exceed expectations, although the magnitude of earnings surprises declined compared with April. Technology and semiconductor companies remained key drivers, while other sectors showed more mixed performance. The Philadelphia Semiconductor Index (SOX) recorded further gains, albeit at a slower pace than in April.
U.S. macroeconomic data released during May indicated continued, albeit gradual, economic stabilization. Labor market conditions remained relatively robust, with non-farm payrolls rising by 115k in April, slightly below the previous month’s increase but still indicative of steady job creation.
Inflation showed signs of stabilization. Headline CPI increased from 3.3 to 3.8%, while core CPI increased from 2.6% to 2.8%, suggesting that underlying price pressures persisted but did not significantly accelerate.
The Federal Reserve maintained its cautious stance, leaving monetary policy unchanged and keeping the federal funds target range at 3.50%-3.75%. Communication from policymakers continued to stress a data-dependent approach.
In fixed-income markets, government bond yields were broadly stable with a slight downward bias. The yield on 10-year U.S. Treasuries increased by 6 basis points, from 4.37% to 4.43%, while 10-year German Bund yields fell by 10 basis points, from 3.04% to 2.94%.
Equity markets also posted gains globally, although at a more moderate pace. The MSCI World Index increased by +4.5% in U.S. dollar terms, while the MSCI Europe Index rose by +3.2% in euro terms, supported by improving sentiment and stable macroeconomic conditions.
Energy and Transportation
Brent crude prices dropped significantly in May, reversing part of the geopolitical-driven gains seen in previous months. The price fell by 19.3% over the course of the month, driven by improving prospects for a potential Iran ceasefire and easing tensions in the Middle East. This shift reflects a market adjustment from earlier supply concerns, as traders unwound protective positions and reassessed a more balanced global supply outlook. By May 29, Brent was trading at approximately USD 92 per barrel, down from USD 114 at the end of April.
Despite the decline in oil prices, European natural gas markets continued to face substantial structural pressures. The closure of the Strait of Hormuz disrupted more than 10 billion cubic feet per day of global LNG supply- roughly 20%, largely tied to Qatar’s Ras Laffan export hub. As a result, the European TTF benchmark remained elevated, trading at around €46/MWh at month-end, supported by ongoing concerns about replenishing gas storage ahead of winter. Meanwhile, the STOXX Europe 600 Oil & Gas Index fell by 6.5%, weighed down by the drop in crude prices.
The transportation sector posted positive but more moderate gains in May following a strong performance in April. The Dow Jones Transportation Average rose by 3.2%, supported by steady economic indicators and ongoing normalization in global supply chains. Lower oil prices, which reduce jet fuel costs, the largest variable expense for airlines, provided a boost to aviation stocks, making this segment the strongest performer within transportation. The US Global Jets Index climbed by 15.4%.
Performance in the marine transportation sector was mixed. Rates for Very Large Crude Carriers (VLCCs) declined by 4% to an average of USD 108k/day, though they remained historically high. In contrast, capesize dry bulk shipping rates rose sharply by 29% to USD 48k/day. Very Large Gas Carrier (VLGC) rates also increased significantly, reaching record levels of USD 178k/day, up another 30%.
In the container shipping market, the Shanghai Containerized Freight Index (SCFI) rose by 35% in May and stood 24% higher than the same period last year. Lower bunker fuel costs offered some margin relief, although pricing pressures persisted. Despite the strong freight rate environment, investors took profits following a robust rally in shipping stocks earlier in the year. Consequently, the Russell 2000 Marine Transportation Index declined by 3.7%. While crude and product tanker stocks weakened, the dry bulk segment performed strongly due to rising capesize rates. LPG and container shipping stocks showed mixed results.
Fund Performance
The Fund’s performance remained broadly flat in its USD-denominated share classes, while the EUR-denominated share classes recorded moderate gains. Overall, the long portfolio contributed +0.75% (USD basis), whereas the short portfolio detracted -0.85% (USD basis).
Within the Energy segment, the long book declined by -1.45%, while the short book contributed +0.95%. Long positions in the Exploration & Production (E&P) segment generated a loss of -0.7%, while corresponding short positions added +0.8%. In the energy services segment, long positions fell by -1.0%, partially offset by a +0.24% contribution from the short book. Renewable energy positions contributed +0.25% on the long side, while short exposure to nuclear energy stocks detracted -0.1%.
Performance across transportation-related segments was mixed but overall balanced. In shipping, short positions detracted -0.8%, while long positions declined by -0.6%. Within the long book, dry bulk shipping, crude/product tankers, and offshore support contributed -0.1%, -0.7%, and +0.1%, respectively. On the short side, positions in crude tankers, LPG carriers, and car carriers contributed +0.4%, -0.4%, and -0.4%, respectively. In other transportation segments, gains from long positions of +0.6% more than offset losses from the short book of -0.3%. Notably, short positions in freight services detracted -0.3%, while long exposure to aviation provided a strong positive contribution of +1.7%.
At the beginning of the month, exposure to the oil services sector was reduced. The position in TGS was lowered from 7.5% to 5% of NAV at a transaction price of NOK 158.67 per share. Similarly, the position in Technip Energies was reduced from 6% to 4% of NAV at EUR 38.06 per share. Conversely, a new position of approximately 1% of NAV was initiated in Constellation Oil Services at an average entry price of NOK 139 per share. This offshore driller is currently trading at a significant discount relative to peers, with an EV/EBITDA multiple of 4.1x and 3.9x for 2026 and 2027, respectively, and a projected free cash flow yield of 15% in 2026. The company benefits from long-term contracts covering approximately 88% of revenues for the 2026–2028 period, making it relatively resilient in a weaker oil price environment.
In the renewable energy sector, a long position in SMA Solar (approximately 3% of NAV) was fully exited at EUR 62.81 per share. Following a recent correction, a new position in Scatec Solar was initiated, building to 2% of NAV at an average price of NOK 105.19. With oil prices stabilizing at more moderate levels, exposure to airlines was slightly increased. A synthetic long position in Air France was established on May 8 via a short put position, with a delta-adjusted exposure of approximately 2% of NAV and a strike price of EUR 10.00 per share.
For more information, you can find our latest Factsheet – May 2026.
Seahawk Investments GmbH
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