In June, persistently sticky inflation saw markets factor in a higher-for-longer inflation and interest rate outlook…
In February 2024, stock markets mostly rose, with the S&P 500 and Nikkei index up, but the FTSE 100 fell due to the UK’s recession. UK inflation is expected to fall, with interest rates possibly dropping by 2026. Foreign ownership of UK companies hit 60%, raising concerns over acquisitions. Nvidia’s market value soared by $700 billion, emphasizing AI’s allure. Smaller tech firms may outperform larger ones in 2024
A mixed January ended on a negative note for equities as investors responded to US Fed chair Jerome Powell’s reiteration that a March interest rate cut was unlikely. Longer dated bonds also succumbed to selling pressure.
Investor sentiment suddenly became positive in November, based on expectations that central banks are winning their fight against inflation and are likely to start reducing interest rates as early as the second quarter of next year. The tech-heavy Nasdaq led the charge, breaking a three month losing streak with a 10.8% advance, making it the strongest month this year.
Stock markets struggled for a third consecutive month as concerns persisted regarding the potential impact on the global economy from interest rates remaining higher for longer in the face of still strong activity in the US. In particular, rising yields from longer-dated bonds made it a tough month for both equity and bond investors.
August turned into a poor month for both equities and bonds as surging US rate expectations and weaker growth in Europe and China challenged the Goldilocks scenario. Erratic price action was exacerbated by thin summer liquidity although markets did stage a modest comeback in the final few days.
Equity investors in developed markets were emboldened by continued economic resilience in the face of sky-high interest
rates and inflation entering disinflation territory. Meanwhile, bonds weakened further as central banks continued to hike rates, putting paid to expectations that 2023 may be the Year of the Bond.
Market Commentary – June 2023 COMMODITIES, BONDS AND EQUITIES LOWER DESPITE TECH ADVANCES It was a month when this year’s acute focus on US Fed interest rate moves shifted to the possibility of a US government debt default as the debt ceiling threatened to be breached in early June. As expected, at the 11th hour, House speaker Kevin McCarthy and President […]
Market Commentary – May 2023 QUIETER MONTH FOR GLOBAL ASSETS DESPITE U.S. BANKING SECTOR & DEBT CEILING JITTERS Stock markets experienced their second consecutive positive month, not withstanding a further bank failure and the ongoing uncertainty about when central banks will pause and then begin reducing interest rates. The S&P 500 gained 1.5% during April, […]
Market Commentary – April 2023 POSITIVE START TO 2023 FOR EQUITIES Developed world stock markets started the year positively but performance became more muted after widespread gains in January. The recent collapse of Silicon Valley Bank and the rescue of Credit Suisse bank by UBS unnerved investors while central banks restated their intentions to continue […]