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Market commentary: What happened in February 2024

Published on 12/03/2024

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Following on from January's 'mixed bag' in financial markets, February stayed true to the theme of 2024 so far. Global share markets continued to fare better than here at home, with both the US and Japan continuing their strong run of performance. 


In what may feel like a never-ending bull market run, the US S&P 500 saw yet another month of growth, ending February up over 6% (in local currency). If you look at this performance in NZ dollars, the growth was even more impressive at 10% - showing the current weakness of the NZD vs the "greenback". Again, it was some of the 'super 7' tech stocks driving a lot of this strong growth within the S&P 500, although one of the leaders of this pack (Apple) saw a steep dip in value. This dip for Apple was due to their revenue forecast over the coming season coming back lower than expected, likely due to weaker iPhone sales out of China. Other tech stocks, on the other hand, continued their growth trajectory with strong earnings and revenue forecasts reported. 


Japan was again a star player in global markets, seeing an even stronger February than the ~8% growth they saw in January. Japan's economy, as a stark contrast to this growth, has not been faring so well - with the country officially entering a recession as of last month. They have attributed their economic growth challenges in part to a shrinking population and work force - something that's being seen in other markets around the world.


Here at home, fears of yet another Official Cash Rate (OCR) hike from the Reserve Bank had a doubly negative effect on both our share market and bonds. Although ANZ Bank was the only major bank to forecast a hike, investors were duly "spooked". The NZX finished February around 1% down, in stark contrast to the 4.5% growth seen across the international market index (the benchmark for global share markets). 


But it wasn't just NZ that experienced investor concerns around central bank behaviour. Around the world and especially in the US, there were murmurings of central banks keeping their official rates higher for longer than originally (optimistically) thought. This had a significant impact on global bond performance, which suffered accordingly. 


And as for what "March madness" will bring - of course we really can't say, with so many ongoing economic, geo-political and other variables at play. We believe it pays to stay the course - investing is for the long-term and you can only control what you can control (for us, that's staying true to our commitment to low fees, ethical investing and giving back) %) 



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