May was a relatively quiet month. There was the usual focus on inflation figures and central banks’ reactions to them (when and how many more interest rate cuts can we expect this year?). If we zoom out for a moment, we can see that the fluctuations in inflation are getting smaller and are moving more and more in the direction aspired to by central banks. In addition to these macroeconomic figures, attention was paid to corporate figures (Nvidia in particular has attracted a lot of interest lately). These reassured markets and prompted higher prices.
The euro was slightly under pressure against the major currencies, except against the Japanese yen. And in commodities, the prices of grain (+14%) and gas (+28%) were notable for their sharp increases.
Shares
May was another good month for equities, and April thus seemed (so far) to have been nothing more than a dip in an upward trend. Last month, the broad MSCI All Countries World Index (developed + emerging markets combined; measured in euros) achieved a positive return of 2.5%. For all of 2024, the index already stands at a handsome 10.8%. Unlike in April, developed markets (+2.9%) outperformed emerging markets (-1.0%). Within developed markets, only Japan failed to finish in the green (-0.2%). Pacific excluding Japan (+1.9%) did considerably better, but could not match North America (+3.1%) and Europe (3.3%). Among emerging markets, the picture was quite the opposite. Only China managed a positive return (+0.9%). Asia finished just in the minus (-0.1%), but EMEA (-3.8%) and Latin America (-4.6%) yielded considerably over the past month. Style growth stocks (+3.5%) significantly outperformed style value stocks (+1.4%).
Bonds
In terms of capital market rates, we faced a diverse picture in May. While in Europe most countries showed a slight increase, a decrease was seen in the US. The 10-year interest rate there fell 0.18% to 4.50%. The 10-year rate on German government bonds rose slightly: +0.08% to 2.66%. This was exactly the same as the rise seen in Dutch government bonds, reaching a level of 2.95%.
Also in May, there was a slightly positive development in bonds with a higher risk profile. For less risky corporate bonds, the decrease in the risk premium was 0.05% (to 1.07%). The same decrease was seen in more risky corporate bonds to a level of 3.33%. However, a different picture was seen in emerging market government bonds. There the risk premium increased by 0.08% to 3.53%.