Skip to main content Skip to site footer

You are using an outdated browser. Please upgrade your browser to improve your experience.

Market Snapshot - May 2024

one month ago

In brief

May has been a month for elections, with India, Mexico and South Africa all going to the polls. For India, early results indicate a continuation of the status quo, while in Mexico the first female president was elected by a landslide. South Africa’s ruling ANC party lost its parliamentary majority and now needs to form a coalition to remain in government.

Ahead of the US presidential election in November, Donald Trump became a convicted felon after he was found guilty on all 34 counts in the ‘hush money’ trial. In the UK, there was growing uncertainty around a hoped for rate cut in June, given the announcement of a general election (to be held on 4 July) plus higher than expected inflation data for April.

The US Federal Reserve (Fed) kept interest rates on hold with chair Jay Powell indicating that patience is needed to “let restrictive policy do its work”. While the minutes of the Fed’s latest rate setting meeting showed that some policymakers had favoured raising rates, Mr Powell signalled that such a move was unlikely.

The Markets


Global equities advanced, with the MSCI All Countries World Index rising 3.8% over May. US stocks were among the strongest performers (S&P 500 +4.8%; Nasdaq +6.9%) as technology stocks rebounded. Nvidia became the third largest company in the US (after Apple and Microsoft) when shares surged after it topped sales forecasts. European and Japanese stocks also moved higher, albeit to a lesser extent (Euro STOXX 50 +1.3%; TOPIX +1.1%). In contrast, emerging market equities lagged (MSCI EM +0.3%), with Chinese equities delivering mixed returns as gains in Hong Kong listed shares were countered by weaker returns from onshore stocks.


It was a mixed month for global government bonds. US bonds closed the month higher as weaker than expected jobs growth and inflation data offset signs of continued economic strength. The 10 year US Treasury returned +1.9% over May. Conversely, despite growing expectations that the European Central Bank (ECB) might cut rates in June, the 10 year German Bund lost 0.2% as eurozone inflation accelerated for the first time this year. Corporate bonds delivered gains: investment grade bonds rose 1.8% (Bloomberg Global Investment Grade Index) while high yield bonds rose 1.6% (ICE BoA Global High Yield Index).


The euro appreciated against the US dollar and the Japanese yen over May. While the ECB is widely expected to start cutting rates in June, thereafter the path of interest rates is less clear with a recent acceleration in eurozone inflation adding to the uncertainty. In contrast, the Fed has signalled that it will keep rates higher for longer and that no reduction should be expected until towards the end of this year. Meanwhile, with the Japanese yen continuing to languish, the Bank of Japan is coming under increasing pressure to raise rates again.


Oil prices retreated amid concerns over a glut of supply, with Brent crude falling 7.1% to close at $81.60 a barrel. Gold prices continued to rise, with the precious metal touching a fresh high during the month, before closing at $2,327.30, to give a monthly increase of 1.4%.

Market Volatility

Market volatility

The Vix Index fell 17.4% to close at 12.9, remaining below the 20 level which is usually viewed to be an indicator of market stability.

Responsible investing

Trade wars in the clean technology sector are escalating. China’s electric vehicle (EV) exports to the US will now be subject to 100% tariffs as President Joe Biden seeks to bolster his support in the ‘rust belt’ manufacturing states. He further announced a sharp jump in tariffs on solar panels. The EU is also considering hiking tariffs on Chinese EVs.

On the radar

  • The ECB is expected to cut rates when it meets in early June. However, the path of rates beyond then is not clear. Eurozone inflation accelerated in May for the first time this year. Wage growth is a particular concern with German wages increasing at the fastest nominal rate since records began in 2008.
  • Will there be a turnaround in China’s struggling property sector following the announcement of recent measures to help embattled developers? Local authorities will now be able to buy residential projects from developers to turn them into social housing, and can also buy land from developers. Additionally, the People’s Bank of China eased lending requirements for first time buyers.
  • In South Africa, after suffering its worst election result since the end of apartheid, the ANC will need to form a coalition. It faces a difficult choice with the next two largest parties being ex-ANC Jacob Zuma’s MK party, which wants to change the constitution, or the Democratic Alliance, hardly a natural partner given some regard it as a white pro-business party.

We use cookies to give you the best possible experience of our website. If you continue, we'll assume you are happy for your web browser to receive all cookies from our website. See our cookie policy for more information on cookies and how to manage them.