May Review 2024
The Federal Reserve opted to maintain their lead Fed funds rate at 5.50% on the 1st of May – the highest amongst western central banks. US Labour data, non-farm payroll figures published on the first Friday of May at last fell in line with expectations following two bitter readings in Q1. US Inflation reading of 3.4% hit the forecast target, with the month-to-month CPI reading of 0.3% (0.4% prev.) showing a slow and steady response from the resilient US consumer.
The Bank of England opted to hold rates at 5.25% before printing promising GDP figures showing 0.4% growth in the UK economy for the month of April.
The FTSE100 Index extended its early Spring rally rising by 4% into the 8400 region. Major UK-listed firms benefitted from a stronger US Dollar which boosted their valuations, before chiming back into the 8200s following a slightly weaker than expected Inflation reading of 2.3% (2.1% forecast) and the announcement of a 4th of July General Election by Prime Minister Rishi Sunak. The UK equity index rose by 2% overall.
Eurozone’s Chief Economist was pleased with the long-awaited Spring wage-pressure data, and signalled a quarter point rate-cut was to follow at their next ECB meeting.
US Equity markets boosted higher following NVIDIA’s latest Q1 earnings release, beating revenue expectations by 262%, with CEO Jensen Huang laying out the company’s blueprint for the Blackwell GPUs successor Rubin – further entrenching their dominance in the generative AI sector.
Elon Musk visited China in an effort to salvage Tesla from the punishing EV market environment with hopes to instead shift the company’s focus towards semi-autonomous AI driving technology, which is set to be rolled out more broadly in partnership with Baidu.
UK Equity markets saw a frenzy of M&A and IPO activity; Czech billionaire Daniel Kretinsky made a successful £5bn takeover bid for IDS Group (Royal Mail) whilst Aussie mining giant BHP’s takeover bid for Anglo American was ultimately quashed for the next six months following poor negotiations. The proposed deal was said to significantly undervalue their key mining assets, with Copper remaining in everybody’s cross hairs, prices are set to rocket in the next 5 years as demand greatly out-strips global supply.
US Crude oil prices fell dramatically to $76 per barrel – down from the $85 peak at the start of April and below the now infamous $80 per barrel inflationary threshold, which makes promising news for Western economies.
Gazprom reported an annual loss of $6.9bn – it’s worst reading in over 25 years, as Russian Gas sales have more than halved since the invasion of Ukraine, meanwhile President Vladimir Putin met with Chinese leader Xi Jinping, in a widely publicised visit to China as they underscored their deepening economic relations.
Gold prices showed continued strength locking in a 3-month gain of 9% amongst the wider geopolitical uncertainty – with no clear end in sight in Ukraine or the Middle East.
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