Global Outlook Q1 2024

The first quarter of 2024 saw a bullish trend across global stock markets, buoyed

by a resilient US economy and escalating interest in Artificial Intelligence (AI).

Despite investor optimism, the anticipated pace of interest rate cuts has been

adjusted to be slower than initially expected, affecting both market dynamics and

bond performance negatively.

In the US, the stock market experienced robust growth, propelled by strong

corporate earnings and the expectation of rate cuts. Although the Federal Reserve

opted to maintain interest rates, indicating a cautious approach towards rate

reductions, the S&P 500 index witnessed substantial gains across various sectors.

Economic indicators continued to show resilience, with GDP growth and

employment figures highlighting a strong economy.

Eurozone markets also enjoyed significant gains, driven by the IT sector's surge

due to AI optimism. Despite some sectors lagging, overall business activity

indicated stabilization, and inflation showed signs of cooling. The European

Central Bank maintained a cautious stance on rate cuts.

In the UK, financial markets saw an upturn, influenced by sectors like financials

and energy. Despite entering a technical recession in the latter half of 2023,

market expectations leaned towards an earlier than anticipated interest rate cut

from the Bank of England.

Japan's market rallied impressively, marking historic highs influenced by foreign

investment and optimism over the economic cycle. The Bank of Japan made

significant policy shifts, indicating confidence in Japan’s economic trajectory.

Emerging Markets displayed mixed performances with notable achievements in

certain markets like Peru and Taiwan, driven by policy measures and AI interest.

However, challenges such as US-China tensions and local economic factors

impacted overall EM performance negatively.

Global bonds faced headwinds as inflation expectations and cautious central bank

policies led to a reassessment of interest rate cut timelines.

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This resulted in increased yields and negative returns for bonds, contrasting with

the strong performance of equities.

Commodities sector witnessed growth across all components, with energy and

livestock leading the gains. Agricultural and industrial metals had varied

performances, while precious metals like gold and silver also saw price increases.

This period underscored the resilience and dynamic nature of global markets,

influenced by technological advancements, policy decisions, and economic

indicators. Despite challenges such as inflation and geopolitical tensions, the

overall positive market s

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