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Market Commentary: What happened in April 2024

Published on 17/05/2024

June market commentary

Our April market commentary is fairly short and simple, given the lack of major events or stand outs to report back. So what did happen in the markets? A combination of ongoing Middle-East tension, heightened geopolitical risks and the US Federal Reserve delaying rate cuts formed the main drivers behind April’s market performance.


US stock markets ran out of puff in April, ending their five month streak of highly positive returns. We saw a noticeable increase in what we call "intra-day market volatility across the month as investors reacted to dramatic headlines and varying economic data. The US S&P 500 index moved either up or down by at least 1% in 7 out of the 22 trading days of the month. We’ve not seen this level of volatility for some time. On a more positive note, the “Magnificent 7” shares continue to steal the spotlight. An ongoing and particular highlight is tech company Nvidia, which is up 74.5% so far this year. Interestingly Nvidia’s return makes up 41% of the total S&P 500’s 2024 return so far!


Back home, the Reserve Bank of New Zealand (RBNZ) delivered a ‘no surprise’ Monetary Policy Review in April, keeping the Official Cash Rate (OCR) steady at 5.5%. The RBNZ believe interest rates need to remain at current levels despite total annual inflation coming down from 4.7 to 4%. We are heading in the right direction, but not fast enough to get the RBNZ excited. Remember that their "target inflation" level is between the 1 and 3% mark - which means we're not quite there yet. In terms of the local stock market, the downward trend continued - with the NZX 50 down 1.2% in April. However, this time NZ wasn't the worst of the bunch - with the ASX 200, the S&P 500 and even Japan's Nikkei 225 all seeing more significant drops for the month.


Coming back to the interest rate review theme, the US Federal Reserve Chair indicated they could wait longer before cutting key interest rates - following surprisingly high inflation data in the US. Other central banks around the world are taking the lead from this super power, mostly maintaining a holding pattern for now. It will be interesting to see who blinks first and finally starts to cut rates..