Commentary
Stocks move higher in May despite a late glitch
Our May 2024 monthly market commentary.
Stocks move higher in May despite a late glitch
Global equity markets rallied for much of May 2024, as signs of slowing inflation and weaker-than-expected economic data bolstered investors’ optimism that the Federal Reserve (Fed) and other major central banks will pivot to a rate-cutting cycle by the end of summer. However, stocks weathered a downturn during the last week of the month after Minneapolis Fed President Neel Kashkari raised the possibility of interest-rate hikes. At the Barclays-CEPR International Monetary Policy Forum in London on May 28, Kashkari commented, “I think the odds of us raising rates are quite low, but I don’t want to take anything off the table.” Kashkari is not a voting member of the Federal Open Market Committee (FOMC), the Fed’s monetary policymaking body responsible for setting the federal-funds rate.
The Nordic countries were the strongest performers among developed equity markets in May, led by Norway and Finland. North America also posted a notable gain attributable mainly to a strong rally in the U.S. The Far East recorded a positive return for the month, but was the primary developed-market laggard due to relative weakness in Japan and Hong Kong. Europe was the top performer within emerging markets for the month, attributable primarily to strength in the Czech Republic. Conversely, Latin America posted a negative return and was the most notable underperformer due to weakness in Brazil.1
1 All equity market performance statements are based on the MSCI ACWI Index.
Disclosures
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding SEI’s portfolios or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.
There are risks involved with investing, including loss of principal. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and smaller companies typically exhibit higher volatility. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities, due to the speculative nature of their investments.
Diversification may not protect against market risk. Past performance does not guarantee future results. Index returns are for illustrative purposes only and do not represent actual portfolio performance. Index returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index.
Information provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company (SEI).
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