In April 2024, global commodity markets thrived, driven by a synchronised manufacturing recovery that spiked demand for metals like gold and copper. Meanwhile, South Africa maintained economic stability, boosting local business and financial growth. Internationally, geopolitical tensions and varying economic policies shaped the complex global economic landscape. This month’s market commentary explores these key developments, offering insights for investors navigating the local and global economy.
LOCAL MARKET HIGHLIGHTS
South Africa
South Africa experienced a relatively stable economic month. Minimal load-shedding supported local business operations which contributed positively to financial markets. The Johannesburg Stock Exchange (JSE) All Share Index grew by 2.95%. Inflation came in below expectation and moderated to 5.3%, which may provide the South African Reserve Bank (SARB) with leeway to adjust interest rates later in the year.
Despite widespread declines in major global equity markets (due to persistent inflation concerns and the anticipated, yet prolonged high US interest rates) South Africa’s JSE demonstrated resilience by outperforming most global markets and closing the month with gains.
Exhibit 1 | Main equity indices
Source: Bloomberg. RMB Markets. Data as of 30 April 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.
GLOBAL MARKET HIGHLIGHTS
Global Commodities
Global commodity markets saw an increase in prices, supported by a synchronised manufacturing recovery across several regions. Precious metals (like gold) reached new highs and industrial metals (such as copper) also saw significant price increases, indicating strong global demand.
Middle East
In the Middle East, geopolitical tension escalated significantly during April, primarily due to conflicts involving Israel and Iran, which impacted global oil markets. In an unprecedented event on 13 April, Iran launched rockets against Israel for the first time, in response to an earlier Israeli attack. This exchange, however, had a limited impact on broader regional stability. Despite these tensions, the oil flow through the Strait of Hormuz remained steady, thereby stabilising global oil markets.
United States
In the United States, the economy demonstrated resilience amid high inflation with strong non-farm payroll numbers and robust retail sales. The Federal Reserve indicated a cautious stance on interest rates, suggesting that higher rates could persist for longer than anticipated. Major US equity markets (including the Dow Jones, Nasdaq, and S&P 500) reflected this economic sentiment and saw declines over the month.
Exhibit 2 | US – S&P 500, Dow Jones and Nasdaq
Source: Bloomberg. RMB Markets. Data as of 30 April 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.
Europe
European markets exhibited mixed performance. The United Kingdom’s FTSE 100 index gained, while other major indices like Germany’s DAX and France’s CAC 40 experienced declines. The European Central Bank signalled that monetary easing could potentially be on the cards in June. In stark contrast, the Fed has held a more conservative policy stance.
Exhibit 3 | Europe – main equity markets
Source: Bloomberg. RMB Markets. Data as of 30 April 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.
Asia
China reported a robust first-quarter GDP growth of 5.3% year-over-year, driven by high export volumes, particularly in the automotive and solar energy sectors. This economic boost was reflected in the strong performance of the Hang Seng Index, which increased by 7.4%, alongside gains in other regional indices. Over the past year, China has purchased about 181 tonnes of gold and is now the world’s sixth-largest holder of gold reserves. Geopolitical tensions between China and the United States have, however, intensified. The United States has threatened to increase tariffs on Chinese goods, which could affect future trade dynamics.
Exhibit 4 | Asia – main equity markets
Source: Bloomberg. RMB Markets. Data as of 30 April 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.
April 2024 saw varied economic performance across the globe, influenced by geopolitical developments, varying monetary policy stances, and sector-specific trends. As these dynamics continue to unfold, understanding their implications will be crucial for stakeholders and policymakers. This report aims to aid investors in navigating the complexities of the global economic landscape, providing insights that can help inform strategic decisions in the coming months.
