Weekly Market Update

April 2024 in review: Volatility and Mixed Economic Data

May 4, 2024

April 2024 was a tumultuous month for financial markets, characterised by significant volatility driven by mixed economic data, corporate earnings, and evolving expectations for interest rates and central bank policies.

Throughout the month, investors grappled with the push and pull between the potential for fiscal stimulus in the U.S. election year and the question of whether the economy was strong enough to stand on its own. Surprisingly strong U.S. wage data and retail sales figures painted a picture of a resilient economy, which paradoxically led to market gains despite the implication of further upward pressure on rates.

However, stronger-than-expected U.S. inflation data, with the Fed's preferred PCE inflation gauge showing prices rising at an annualised pace of over 4%, cast doubt on the Federal Reserve's rate-cutting timeline. This led to a rise in U.S. Treasury yields, briefly causing selloffs in equities.

Despite the challenges, the tech-heavy Nasdaq Composite recovered from being over 6% down to finish just 2% down while the broader S&P 500 ended down by a similar amount with a bit less volatility. Cheaper cyclicals like the UK, Europe and emerging markets showed more resilience, with the UK and emerging markets delivering a monthly gain of over 3%, boosted by slightly better news from China and a bouyant Latin America.

In Australia, the ASX 300 was also down recorded3% or so weighed down by REITs, Banks and smaller companies while Materials were steadier as Iron Ore prices stabilised.  The Australian dollar strengthened against the U.S. dollar, appreciating by 1.8% to reach US 65 cents, supported by higher iron ore prices and a softer USD.

Bond markets faced headwinds as yields climbed across the curve, reflecting the "higher for longer" rate environment. Australian 10-year yields rose 13 basis points to 4.52%, while U.S. 10-year yields added 5 basis points to reach 4.67%. High yield credit (+0.4%) outperformed both investment grade (-0.2%) and government bonds (-0.4%).

As April drew to a close, investors remained focused on upcoming central bank meetings, particularly the Fed, for clues on the rate outlook. The currentn US corporate earnings reports has also shone aspot light on the polarisation within the US economy and so far the indications are that this big tech will have to prop up the economy while cracks may be appearing in the strength of the US consumer.

Financial Markets Grapple with Implications of Fed's Shift in Signals

August 28, 2024
Read More

Looking around the corner on China, Australia and the US with Economist Andrew Hunt

August 28, 2024
Read More

US Market Settle as Australian Reporting Takes Centre Stage

August 15, 2024
Read More

Preview of the Portfolio Construction Forum Strategy Summit 2024 with Jonathan Ramsay & Jonathan Tolub

August 13, 2024
Join Us at the Portfolio Construction Forum’s Strategy Summit in Sydney
Read More

Market Turbulence Following Weak U.S. Jobs Report and Surprise Rate Hikes in Japan

August 13, 2024
Read More

Bad news equals good news

August 2, 2024
In recent years professional investors have got increasingly used to the fact that good news is bad news for markets because higher interest rates are likely to be necessary, and of course vice-versa. However, last week the effect was stronger than ever and stocks rallied mid-week amidst reports of widespread lay-offs and expectations of a weak US jobs report.
Read More

The Implications of Trump's (likely) Clean Sweep: A Turning Point for the Global Economy

November 8, 2024
Read More

Markets Hold Steady with Eyes on the U.S. Elections and Economic Updates

October 31, 2024
Read More

Key Insights from the H&B NSW 2024 Wealth Symposium

October 30, 2024
Read More

Markets Mixed as Australia Shows Resilience Amid Global Slowdown Signals

October 30, 2024
Read More

10-Year Series Part 5: The Anglo Saxon Property Reset and Productivity and Energy that Doesn't Cost the Earth

October 30, 2024
Read More

10-Year Series Part 4: Japan -Euthanasia of the Saver & Eurozone Competitiveness Differentials

October 16, 2024
Read More

Markets slid again last week, with a concentrated sell off in US tech

August 2, 2024
Markets slid again last week but the selling was concentrated in US tech, most of which is down 10% or so this year. Much of last week’s selling occurred in the last 2 sessions of the week.
Read More

Recession fears build, yet equity markets end the week higher

August 2, 2024
Fears of a US recession later this year gathered pace last week and the US equity market jumped by almost 7% and the Nasdaq was up some 9%.
Read More

Inflation - Flash Update

August 2, 2024
In light of the recent inflation data coming out of the US, we dive in to why the market is so upset about a 0.1% increase in prices, and what this means from an Australian investor's perspective.
Read More

Interest rate sensitivity persists into the new year

August 2, 2024
During the last few weeks, the prospect of rising interest rate expectations continued to grip markets, as the soft landing/rapid disinflation thesis was tested.
Read More

Strong start to the year continues despite recession concerns

August 2, 2024
As the world’s elite gathered in a snowless Davos, markets focused on much more immediate concerns, starting with the continuing wave of layoffs in corporate America. Amazon, Microsoft, Alphabet (Google’s parent company), Salesforce and Goldman Sachs, among others, took turns to announce staff cuts. It would appear boardrooms and CEOs are lending some credence to the possibility of a recession in 2023.
Read More

Equities turbulent but resilient as interest rates rise

August 2, 2024
Last week the S&P 500 traded in a 3% range, having done a 2% round trip on Thursday, followed by a 3% fall on Friday after the inflation data release and then another almost 2% round trip yesterday. Emerging markets were the worst performing, down 4% for the week. Taking a step back though, most equity markets haven’t given back that much of their gains from January, while Europe and the Nasdaq remain up 10% for the year.
Read More

Helping your clients assess the climate impact of their Portfolio

August 2, 2024
Nathan Fradley explains how the ethosesg technology can help you assess and design an ethical portfolio that aligns to an investor’s personal values.
Read More

Carbon credits and investing – is it the outcome we expect?

August 2, 2024
ETFs that invest in carbon credits are now available. Why should we assume that their price will go up over time? And does buying a carbon credit ETF actually contribute positively to emissions reduction? Will it actually generate the outcome investors are expecting? This article explores the issues around investing in carbon credits.
Read More

Better World makes a difference with investment in renewables

August 2, 2024
There are many direct assets and funds that contribute positively to climate action within the InvestSense Better World Portfolios. Meridian Energy is one of the stand-out direct assets in the portfolio with a climate energy focus.
Read More

Bad news equals good news

August 2, 2024
In recent years professional investors have got increasingly used to the fact that good news is bad news for markets because higher interest rates are likely to be necessary, and of course vice-versa. However, last week the effect was stronger than ever and stocks rallied mid-week amidst reports of widespread lay-offs and expectations of a weak US jobs report.
Read More

‘Buy the dip’ opportunism start surfacing

August 2, 2024
The US market finally market caught a bid last week. Early in the week the market was down few percent after an earnings miss by ad dependent social media platform Snap (of Snapchat fame) combined with weak guidance raised more doubts about the economy and economic resilience of tech companies.
Read More

US momentarily dips into official bear market territory

August 2, 2024
The seventh negative week in a row for the US sent it briefly into official bear market territory before it recovered slightly late on Friday. The world’s largest stocks (Apple, Microsoft Amazon and Google) are all down 25%.
Read More

How Mark Lewin saved 13 hours a week with Managed Accounts

August 2, 2024
Mark Lewin was a financial planner, but is now the Director of Back Office Heros. In his planning business he gained significant efficiencies by recommending and implementing managed accounts for his clients. He tells us how...
Read More
Icon of a letter

InvestSense insights, delivered straight to your inbox.

Icon of a letter

Get the latest industry news

Icon of a letter

Get the latest industry news

Icon of a letter

Get the latest industry news