Market Wrap May 2024

• April saw a reversal from March’s solid performance. Only Global emerging market shares and cash produced positive returns.
• Global shares on an unhedged basis lost 3.2%, while global shares on a hedged basis lost 2.8%. The best performing styles were Value-Weighted and Equal Weight. It should be noted that the differentiation between styles was relatively small this month and all styles produced negative returns.
• Global emerging market shares was the best performing asset class for the month returning 1.2%.
• Australian shares lost almost the same amount this month that they gained last month, with the broad market index, the S&P/ASX 200 Accumulation Index losing 2.9% for the month. The best performing styles for the month, although negative, were Momentum and Small Caps.
• Fixed income lost ground this month with Australian Fixed Interest losing 2.0%, while global fixed interest lost 1.7%.
• The Australian dollar lost 0.5% against the U.S. dollar over the month, but gained 3.5% against the Yen.

Unemployment rises slightly

Globally

• The unemployment rate in the United States edged up to 3.9% in April 2024 from 3.8% in the previous month and surprising the market, which had forecasted the rate to remain unchanged. The number of unemployed individuals increased by 63,000 to 6.492 million, while employment levels went up by 25,000 to reach 161.491 million.
• The Federal Reserve kept the target range for the federal funds rate unchanged at 5.25%-5.50% during its early May meeting, which was the sixth consecutive time it remained unchanged. Fed Chair Powell stated that he does not foresee a hike as likely and believes that the current policy is sufficiently restrictive to achieve the 2% inflation target.

Locally

• The monthly Consumer Price Index (CPI) indicator in Australia increased by 3.5% in the year to March 2024, up from 3.4% in the previous three months, which had been the lowest since November 2021. The latest reading pointed to the highest in 4 months, mainly due to faster rises in housing and transport prices.
• Australia's seasonally adjusted unemployment rate ticked higher to 3.8% in March 2024 from February’s five-month low of 3.7%, but below market forecasts of 3.9%.