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Monthly market summary – Review of April 2024

Date: 24 May 2024

3 minute read

Our market summary

Developed market equities retreated 2.8% in the face of persistently robust US inflation data that forced investors to reappraise the likelihood of near-term interest-rate cuts. Emerging markets delivered modest gains driven by a resurgent China, which was the top performing regional market. Thanks to its high weighting to buoyant energy and commodity companies, the UK was the second-best performing regional market. In fixed-income markets, government bonds retreated due to the prospect of interest rates staying higher for longer, while corporate bonds delivered more muted losses.

Equity markets

US

US

Despite US GDP growth more than halving to 1.6% in the first quarter, the news that US inflation (CPI) jumped to 3.5% in March, coupled with rising labour costs, saw hopes of US interest-rate cuts fade. US equities retreated 3.3% with those stocks that came up short in earnings season being severely punished by investors. Interest-rate sensitive areas, such as real estate and technology, were hard hit while utility stocks were the top performers.

Europe

Europe

Europe exited recession in the first quarter with a 0.3% gain in GDP while inflation remained flat at 2.4% in April. Added to this, markets now expect a June rate cut from the European Central Bank (ECB). Even so, European equities followed US markets down, declining by 1.9%. Technology and consumer discretionary stocks were the weakest sectors. In contrast, energy sector stocks outperformed, as energy prices rose, as did real-estate stocks.

UK

UK

UK equities rallied 2.4% as modest valuations were highlighted by the bid for the miner Anglo American. Rising commodity prices and a strong dollar also supported the UK index, with oil prices making highs for the year amid rising tensions in the Middle East. The UK’s financial stocks made headway, as did healthcare and consumer staples stocks, due partly to their high levels of dollar revenues, while inflation continued to fall, supporting calls for rate cuts.

Emerging markets

Emerging markets

Chinese equities jumped 7.6% to help emerging markets gain 1.4%. Turkey outperformed China as promises of more orthodox monetary policy wooed overseas investors. Elsewhere, Hungary, Peru and South Africa beat the broader emerging market index while India’s strong run continued. Middle Eastern markets declined as regional tensions rose, Chile and major Latin markets declined in the face of US dollar strength while Egypt was the worst performer again.

Fixed income

With March’s US inflation report showing a third consecutive above-consensus core CPI reading and another strong US labour market report, hopes of US interest-rate cuts faded. US Treasury yields hit a new high for the year as the ‘higher-for-longer’ narrative for interest rates hit home. US Treasuries and UK gilts sank, while sterling-denominated corporate bonds suffered similar losses.


Source: Quilter Investors as at 30 April 2024. Total return, percentage growth in pounds sterling except where shown, rounded to one decimal place. The performance shown for global equities is represented by the MSCI AC World Index; developed market equities by the MSCI World Index; US equities by the MSCI USA Index; European equities by the MSCI Europe ex UK Index; UK equities by the MSCI United Kingdom All Cap Index; UK smaller companies by the MSCI United Kingdom Small Cap Index; emerging markets by the MSCI Emerging Markets Index.

Important Information

Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The value of investments may go down as well as up and investors may not get back the amount originally invested.

This communication is issued by Quilter Investors, a trading name of Quilter Investors Limited. Quilter Investors is registered in England and Wales under number 04227837 and is authorised and regulated by the Financial Conduct Authority (FCA) under number 208543. Registered office: Senator House, 85 Queen Victoria Street, London, United Kingdom, EC4V 4AB.

This communication is for information purposes only. Quilter Investors uses all reasonable skill and care in compiling the information in this communication and in ensuring its accuracy, but no assurances or warranties are given. Investors should not rely on the information in this communication when making investment decisions. Nothing in this communication constitutes advice or a personal recommendation. This communication is for information purposes only and is not an offer or solicitation to buy or sell any Quilter Investors portfolio or fund.

Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Quilter Investors as a result of using different assumptions and criteria.

Data from third parties is included in this communication and those third parties do not accept any liability for errors and omissions. Investors should read the important information provided by the third parties, which can be found at www.quilter.com/third-party-data. Where this communication contains data from third parties, Quilter Investors cannot guarantee the accuracy, reliability or completeness of the third-party data and accepts no responsibility or liability whatsoever in respect of such data.

Marcus Brookes

Chief Investment Officer & Managing Director

Marcus is chief investment officer and managing director of Quilter Investors. Marcus joined Quilter Investors in December 2021 from Schroders Personal Wealth, where he also held the role of chief investment officer. He has considerable investment management experience with a deep understanding of the multi-asset sector having managed multi-manager fund ranges for more than 20 years.

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