Market review

May in review

May was a more upbeat month for capital markets, with most asset classes recovering from the losses of April. Although markets were more challenged towards the end of the month as global inflation data proved stickier than expected, overall investors grew more confident that rate cuts would still happen this year.

6 Jun 2024

8 minutes

Chapters

01
Global equities
02
US
03
South Africa
04
China
05
Emerging markets
06
Europe and UK
07
Global fixed income
08
Global credit
09
EM fixed income
10
Commodities
01

Global equities

Shipping containers
The name of the game is still inflation and interest rates.

After a temporary correction in April, global equities resumed their upward march in May. Slowing US inflation and weakening labour data boosted hopes of a soft landing for the world’s biggest economy. The S&P 500 and Stoxx 600 reached new all-time highs mid-month; UK stocks also rose on the positive sentiment as did the Nikkei. Although markets were more challenged towards the end of the month due to stickier-than-expected inflation data – particularly in Europe - investors grew more confident that rate cuts would still happen this year. This was supported by the Swedish Riksbank, which delivered its first rate cut since 2016, leading to an increased expectation that other central banks would follow.

Developed markets outperformed emerging markets. After experiencing something of a renaissance this year, Hong Kong and Chinese mainland stocks fell back in May as supportive economic data was partially offset by the prospect of more US trade tariffs on various industries.

At the sector level, 2024’s standout IT sector continues to deliver returns, followed by utility stocks. The Fed’s outlook for interest rates, coupled with AI’s insatiable demand for electricity, has made the sector more attractive. Energy stocks, although positive for the month, underperformed as WTI crude prices hit a 3-month low, falling more than 2%.

Indices (total return in local currency)
S&P 500 4.9%
Nasdaq Composite 7.0%
MSCI ACWI 4.1%
Nikkei 225 0.2%
EuroStoxx 600 3.3%
FTSE 100 2.1%
Hang Seng Index 2.5%
SSE Composite -0.4%

Source: Bloomberg, for the month ending 31 May, 2024.

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