April Review 2024
10-05-2024
In April, global geopolitics took centre stage, a strike on the Iranian Embassy in Damascus on the 1st of April aggravated tensions in the Middle East, casting a spell of volatility across Western markets.
Inflation readings printed by The Federal Reserve were hotter than expected. The United States Annual Consumer Price Index figures came in at 3.5%, 0.3% higher than the previous 3.2% reading and 0.1% higher than their expectations.
United Kingdom Annual Consumer Price Index figures came in at 3.2%, 0.2% lower than the previous 3.4% reading and 0.1% higher than forecast.
US markets were stirred, with the S&P 500 closing the month down 3.37%. This retracement wiped out March’s gain, effectively re-winding the value clock to the 21st of February – marking a net YTD growth of ~5.5% at the end of April.
The Federal Reserve continued preaching patience for rate cuts, with traders losing confidence following the pared-back odds from 7 cuts to 3 cuts, and some even contingency planning for a possible rate hike.
The FTSE100 spurred on to all-time highs, marking new territory for the Index. Much of the gain was attributed to the Dollar’s extended gain to 1.23 against the Pound Sterling, its weakest since November 2023.
The rising value of the index points to the continued shift away from trailblazer tech-stocks to the lagging value stocks which began in Q1. Improved expectations of an early rate cut from the BoE also bolstered the Index – up 2.4% on the month, in stark contrast to the sombre 3.4% drop in the US tech-heavy S&P500 index.
Dual-listed mining giant BHP made an opportunistic takeover bid for smaller FTSE-listed counterpart Anglo American in their efforts to acquire a controlling stake in the copper market. Chinese demand for the key metal has soared and is anticipated to further strengthen as it expands into the growing electric vehicle sector with global demand projected to greatly outstrip supply before 2030.
Gold prices extended their blockbuster March rally albeit at a slower pace of ~4% following the extended crisis in the Middle East.
Western Texas Intermediate (WTI) crude prices fell ~3.3% down to the $80 mark, reducing inflationary pressure from the booming US economy. Greater output from shale drilling in the Permian Basin and increased US LNG exports to Europe have weighed down market prices in the face of extended Saudi-led OPEC+ production cuts.
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