Macro: Sandcastle economics
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May market performance: Back in black (or blue)
Market Rewind
Søren Otto Simonsen
Senior Investment Editor
Global equities made up for April’s negative performance and then some in May. In an earnings-heavy month, global equities climbed 4.2% in May against a fall in April of 3.9%. A broad-based move, which comes on the back of a general easing of financial conditions as central banks entertain rate cuts and of a pretty good earnings season.
The US leads the pack in terms of regional performance with an increase of 4.8% for the month. Here, softer inflation figures coupled with strong earnings (e.g. by chipmaker Nvidia, which is up more than 20% for the month) sent the market up.
Europe had a strong month as well, climbing 2.5%, as the region is set for easing financial conditions based on the expected rate cut by the ECB in the first week of June.
Asia and emerging markets returned 1.5% and 0.3% respectively. Negative key figures in China pulled down both regions, while the surge in Japanese equities held the Asian index up, but not the emerging markets one (as Japan isn’t part of the EM index).
Information technology is the best-performing sector in May returning 8.5%, as some of its constituents (and some of the biggest companies out there) like Nvidia, Microsoft and Apple posted positive returns. This move is, among other things, based on the continuous focus on AI and other tech-related industries.
Utilities and communication services also posted strong returns of more than 6%, while energy and consumer discretionary were the worst performers, closing it out basically flat for the month.
Bond returns were – on an aggregate level – slightly below 1%, with corporate bonds performing better than sovereigns. Bonds continue to move with inflation expectations and interest rates.
Check out the rest of this month’s performance figures here:
Sources: Bloomberg and Saxo
Global equities are measured using the MSCI World Index. Equity regions are measured using the S&P 500 (US) and the MSCI indices Europe, AC Asia Pacific, and EM, respectively. Equity sectors are measured using the MSCI World/Sector indices, e.g., MSCI World/Energy. Bonds are measured using the USD hedged Bloomberg Aggregate Total Return indices for total, sovereign, and corporate, respectively. Global commodities are measured using the Bloomberg Commodity Index. Oil is measured using the next consecutive month’s WTI (West Texas Intermediate) Crude oil futures contract (Generic 1st CL Future). Gold is measured using the gold spot dollar price per ounce. The US dollar currency spot is measured using the Dollar Index Spot, measuring it against a weighted basket of the following currencies: EUR, JPY (Japanese yen), GBP, CAD, SEK, and CHF. Unless otherwise specified, figures are in local currencies.
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