Your March and April 2024 global market update

Last time, in our January and February 2024 global market update, we reported that six key stock market indices from around the world had posted positive returns.

Unfortunately, by the end of April, three of these major indices had reported downturns. The below table reports index performances between 1 and 30 April 2024.

Source: JP Morgan

Keep reading to discover key takeaways from market movements in the UK, Europe, the US, and Asia.

UK

You may be pleased to read that despite some indices reporting downturns, the UK FTSE All-Share posted a 2.5% return in April.

According to the Office for National Statistics (ONS), the UK labour market saw an uptick at the start of the year, with 352,000 more payrolled employees registered between February 2023 and February 2024.

What’s more, the reports that inflation rose by 3.2% in the year to March 2024, down from 3.4% in February.

Meanwhile, the Bank of England (BoE) kept the base rate of interest fixed at 5.25%, as it has done since August 2023.

All this, in combination with a solid performance from the energy and commodities sectors, contributed to the UK FTSE All Share being the highest-performing index in the above chart for April.

US

US markets have been performing impressively since the final quarter of 2023 – but in April 2024, the tide began to turn.

Interestingly, in Q1 2024 (ending on 31 March), the S&P 500 posted a 10.6% return thanks to an expectation that the Federal Reserve (Fed) would cut central interest later in the year, among other factors.

But throughout April, rising bond yields placed pressure on equity valuations. When bond yields rise, this increases borrowing costs for corporations, potentially leading to lower profit margins that are then reflected in a company’s share price.

This said, according to the US Bureau of Labor Statistics, total nonfarm labour employment grew by 175,000 in April. Plus, the Bureau of Economic Analysis says that US GDP grew by 1.6% in the first quarter of the year.

As such, there is no need to panic if you hold US stocks that fell in value in April. Remember that short-term market volatility is normal, and that this may not have an impact on your long-term investment goals.

Eurozone

As you read in the above table, the MSCI Europe ex-UK index reported a -1.5% return in April.

Yet our discretionary fund manager (DFM), Brooks Macdonald, reported that several regions hit all-time highs in Q1 2024, including European markets. So, the dip experienced in April may simply reflect a cooling off period after a surge in investor confidence at the start of the year.

What’s more, preliminary figures reflect that eurozone inflation has remained stubborn at 2.4% in April, according to CNBC, perhaps contributing to the poor performance of European markets.

In more positive news, CNBC also says that GDP across the region rose by 0.3% in the first quarter of 2024, seeing an end to the recessionary conditions experienced in the final quarter of 2023.

Of course, the ongoing war in Ukraine could continue to have an effect on share prices as well as the overall economic outlook for Europe.

Asia

Surprisingly, the Japan TOPIX reported negative growth of -0.9% in April, after returning extraordinary highs last year (in the year to April 2024, the index saw a 17.1% return).

This has to do with Japanese currency, the yen, reaching a “decade’s low” in April, according to the Guardian, due to a widening gap between Japan’s central interest rate and the interest rates of other major nations. In addition, Japan is experiencing labour shortages, and among other factors, this led to Japan sliding into a recession in February 2024.

As a result, the Bank of Japan (BoJ) increased its historically low central interest rate from -0.1% to between 0% and 0.1% in March – its first interest rate uplift in 17 years.

Outside of Japan, the MSCI Asia ex-Japan reported a 1.3% gain in April. This is positive news considering that in China, negative inflation had dampened investors’ confidence in markets throughout 2023 and at the start of 2024.

We can help you put together an investment portfolio based on your unique goals

Here at Prosser Knowles, we understand that building an investment portfolio geared towards your specific goals can be difficult.

Professional investment advice can help you feel confident in your decisions and help you to take control of your future. Email enquiries@prosserknowles.co.uk or request a callback from one of our advisers.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.