Signia Invest Insights | June 2024
Market Review and Outlook
It goes without saying that the single biggest highlight this month was the US presidential debate. Political depression has never felt so severe, nor been so painfully entertaining. I am not a fan of reality TV but I have already penciled in the second and final episode (I mean debate) on Tuesday 10th September. Let’s hope there is a golf match or driving contest in-between! More on the debate and US election drama below.
Equities continued their advance in June with the All Country World Index rising 2.1%, led again by the S&P 500 which was up 3.5% and reaching another all-time high (31 times in fact during the first half of the year), thanks to further gains by the Magnificent 7 stocks. Unsurprisingly then, the Nasdaq Composite fared better, up 6.0% during the month, whilst Nvidia was up 12.7%. Equity gains were particularly narrow as remarkably the equal-weighted S&P 500 Index actually lost ground in June, declining -0.7%. Japan continues to do well, and the Nikkei 225 gained 2.8% in June for a first-half performance of 18.3%, making it the best-performing major market this year. Emerging market equities rallied over 3% but are still underperforming for the year at 6.1%.
Performance dispersion continues to increase between sectors as well as between countries and regions. European equities were down in June, losing -1.3% but remain up 6.8% year-to-date, roughly half the performance of US equity markets. This underperformance was primarily caused by the surprise outcome of the elections to the European Parliament, which resulted in the French President, Emmanuel Macron, dissolving his country’s parliament and calling snap elections. As a result, French equity and bond markets sold off, significantly widening the spread of French sovereign bond yields over German bund yields. The French CAC 40 equity index lost -6.4% and is now the only major equity index that is down in 2024.
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