Market Pulse - April 2024

Key themes

Global stock markets gave back some of their 2024 gains in April, and bond prices declined, as the potential for ‘higher-for-longer’ rates dampened sentiment. Sticky US inflation data meant that expectations of rate cuts from the US Federal Reserve (Fed) were pushed out and reduced.
However, the European Central Bank (ECB) continued to suggest that monetary easing would likely start in June as inflation continued to move towards its 2% target.
Global activity data was somewhat mixed in April, with signs of slower growth in the US and an acceleration in Europe.

Markets snapshot

The MSCI All Country World index fell by 2.7% (-2.3% in euros) over the month.
The MSCI USA declined by 4.1% (-3.2% in euros).
European ex-UK equities were down by 1.5% (-1.8% in euros).
Small cap equities declined by 4.4% (-4.2% in euros), hampered by rising interest rates and expectations of less monetary easing.
Emerging market (EM) equities rallied by 1.4% (1.5% in euros) in April, supported by a rally in Chinese equities (+6.5%).
Global bonds were hampered by broadly rising yields in April. Bond prices were lower as expectations for rate cuts in 2024 were pared back amid sticky inflation, particularly in the US. The ICE BofA 5+ Year Euro Government bond index returned -2.0% over the month.
European investment grade (IG) corporate bonds returned -0.8% as yields rose by 23 basis points (bps) to 3.98%, with the spread narrowing marginally (by 1bp to 111bps). Global high yield bonds returned –0.7% as yields increased by 27bps to 7.17%, and spreads narrowed by 8bps to 253bps over the month.

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