Market Review Over May 2024

April was a tough period for risky assets, but the month of May allowed for a global recovery amid investor optimism about the economic outlook. Equity markets rebounded strongly with the S&P 500 up 4.96% (+10.64% YTD), supported by better-than-expected first quarter earnings results. The MSCI World gained 4.53% (in USD, +8.71% YTD) while the MSCI EMU added 1.73% (+9.04% YTD).

All S&P sectors ended the month in the green, except for energy, which was down 0.97%. After peaking in April, oil prices retreated during May. The Organisation of the Petroleum Exporting Countries and its allies (OPEC+), left open the possibility that voluntary cuts by eight of its members could be gradually unwound from October onward.

The information technology sector was the best performer, up 9.95% for the month, bolstered by Nvidia Corp's spectacular performance. Nvidia's stock rose almost 27% in May and is up more than 121% year-to-date, driven by strong first-quarter earnings and robust revenue guidance for the current quarter. Notably, Nvidia is now the second-largest component within the S&P 500 and the Nasdaq Composite, surpassing Apple (+2.26% YTD) and trailing only Microsoft (+12.71% YTD). Given its market dominance, one might even wonder if the company will eventually take the top spot.

Overall, bonds also posted positive performance as markets continued to anticipate rate cuts this year, though expectations for timing differ between the U.S. and Europe. The 10-year German Bund yield closed at 2.66% (+8bps in May), while the 10-year U.S. Treasury yield decreased by 18bps to 4.50%.

Credit markets ended in positive territory. The S&P Eurozone Investment Grade Corporate Bond Index gained 0.27%, while the S&P 500 Investment Grade Corporate Bond Index in the U.S. increased by 1.76%. In the high-yield segment, the MSCI EUR High Yield Corporate Bond Index gained 0.92%, and the S&P U.S. High Yield Corporate Bond Index advanced by 1.28%.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.