Market Watch for April 2024

April Market Shift: Global Downturn, SA Equity Resilience

Global equities reversed course in April, dropping 3.4% after five months of gains. Rising inflation and moderating growth led to a policy rethink, with Fed rate cuts scaled back. Emerging markets fared better, with South Africa outperforming for the second month.

SA Equities Shine: The resources sector surged 7.1% on the back of Anglo American’s rise due to BHP’s bid. Local bonds rebounded after initial volatility, with election polls calming nerves.

Inflation Concerns: Headline inflation moderated to 5.3%, but transport price hikes and potential food price increases worry the SARB. A rate cut delay and potential target revision are on the table.

Economic Growth Mixed: Mining boomed, but overall Q1 output is down. Retail sales remain muted, while wholesale trade shows some resilience. Expectations of monetary easing are fading, with a possible rate hike by year-end now considered.

Election Uncertainty: Debt concerns and global rate hikes initially pressured yields, but election surveys suggesting a stable government offered some relief.

Looking Ahead: April’s market shift highlights the interplay between global and local factors. While opportunities exist in the volatile landscape, South Africa faces challenges with inflation, growth, and political uncertainty.

To find out more about the current market situation, read the Market Watch for April 2024 below:

Missed last month and need to catch up? Read the March market watch here.