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May Global Commentary: Equity markets deliver their strongest monthly performance yet in 2024

Global equity markets bounced back strongly in May after a disappointing April, delivering the strongest monthly performance thus far in 2024 (MSCI World Index +4.5% MoM). A few mega-cap US tech stocks disproportionately skewed equity market performance. Nvidia’s share price (+27% MoM) has more than doubled in 2024 (+121% YTD) after rallying 240% in 2023, contributing one-fifth to the MSCI World’s performance in May. Between them, Apple (+13% MoM) and Microsoft (+7% MoM) were also responsible for one-fifth of May’s global equity index performance. Nvidia’s May rally followed its earnings update, which was ahead of analyst expectations and accompanied by a bullish sales forecast showing that AI computing spend remains strong. Energy shares were the only S&P 500 sector to experience a dip in May (-0.4% MoM), dragged down by the Brent crude oil price (-7.1% MoM) as rising US inventories, reduced anxiety over the ongoing Middle East conflict and concerns around China’s continued lacklustre economic performance weighed on the oil price. Brent crude ended May at US$82/bbl after trading above US$90/bbl in April.

Emerging markets (EMs) also had a positive May (MSCI EM +2.5% MoM) with another decent month for Chinese stocks, particularly those listed offshore (Hong Kong-listed Chinese companies +2.2% MoM, US-listed Chinese companies +2.8% MoM). While China’s economic data still paints the picture of a struggling economy, Chinese government officials announced a raft of stimulus measures aimed at boosting the country’s troubled property sector, which should go some way to improving consumer and investor confidence. Brazilian shares (Bovespa -3.0% MoM) were a negative outlier in EMs and are now down 9% YTD following 2023, where they were the star EM performers (+22% YoY).

Positive investor sentiment in May was at least partially driven by fading pessimism around the longevity of elevated US inflation and interest rates, as the latest US inflation data showed a resumption of the decline in the pace of core inflation (+3.6% YoY from +3.8% YoY in the prior month). The US government’s 10-year borrowing rate fell in May (to 4.5% p.a.), dragging the US dollar down. The US Dollar Index (-1.5% MoM) fell for the first time in 2024, with the US dollar weaker against most major currencies in May.



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WEBINAR | The Navigator – Anchor’s Strategy and Asset Allocation, 2Q24

Anchor CEO and Co-CIO Peter Armitage will host the webinar, provide an introduction to current global and local market conditions and give his thoughts on offshore equities. Together with Head of Fixed Income and Co-CIO Nolan Wapenaar, Pete will also discuss Anchor’s strategy and asset allocation for 2Q24, focusing on global equities and bonds. In addition, Fund Manager Liam Hechter will provide insights into local equities, highlighting some investment ideas; Global Equities Analyst James Bennet will discuss Ferrari and give an update on Tesla, and finally, Analyst Thomas Hendricks will participate in a Q&A with Peter, explaining the 10-year US Treasury to attendees.