Market Pulse - February 2024

• Monthly Market Pulse
• 06.03.24
• ILIM

Key themes

• Numerous global stock markets rallied to new all-time highs in February, buoyed by the expectation of interest rate cuts later in 2024, strong labour markets, a better-than-expected earnings reporting season and the potential for increased profits from the application of artificial intelligence (AI).
• Global activity data was mixed, with US data generally remaining strong, although there were some indications of slowing household consumption and reaccelerating inflation. Activity in Europe remained subdued, although sentiment surveys mainly showed continued improvement.
• Major central banks pushed against the notion of rate cuts in Q1, suggesting that monetary easing for the US Federal Reserve (Fed) and the European Central Bank (ECB) would start around mid-year or even later. Bond markets fell in response to the somewhat hawkish central bank commentary.

Markets snapshot

• The MSCI All Country World index was up by 4.7% (4.7% in euros) over the month.
• The MSCI USA rallied by 5.4% (5.8% in euros).
• European ex-UK equities were up by 2.8% (2.4% in euros).
• The MSCI Japan was up by 5.5% (3.4% in euros) in February.
• Global bond markets fell in February, hampered by rising yields as the timing of rate cuts for 2024 was pushed out and the magnitude of expected cuts was reduced. The ICE BofA 5+ Year Euro Government bond index was down by 1.4% over the month.