The Cambridge Weekly –7th May 2024

The Cambridge Weekly –7th May 2024

Still sticking to the plan

Equity and bond markets have had a reasonably good week, with policy makers helping to calm nerves. Geopolitical concerns retreated further; the US and Saudi Arabia are close to a bilateral agreement which may well include the formal recognition of Israel. Meanwhile, the first quarter’s results have been generally good, alongside some large buyback disbursements. Apple announced the largest ever forthcoming share purchase of $110bn, beating the previous largest by $10bn (which was also Apple in 2018).

April 2024 asset returns review

April was challenging for investors. After a stellar start to 2024, the first quarter’s optimism faded and stock market returns were negative on the month for most regions. Overall, global stocks lost 2.4% of their value in sterling terms through April. Capital markets grappled with the fact that growth and inflation do not seem to be dropping away – most notably in the US. That has pros and cons: resilient growth means stronger corporate earnings, but sticky inflation means central banks cannot cut interest rates as soon or by as much as markets had expected. Even with the pullback, though, year-to-date returns are still strong. Since the market trough late last October, global stocks are up 36.2% in sterling terms – as the table of returns shows.