Monthly Market News April 2024 – Market Trends

Alexandre Gauthy - Economist

Equity markets were volatile in April and ended the month lower. Bond yields rose across the curve on slightly higher-than-expected US inflation readings.

Our expert, Alexandre Gauthy, analyses the trends in the markets in April 2024.

Equity markets: pause in the stock market rally

In April, global equities fell 2.3% in euro terms. In common currency, emerging market equities were the only ones to end the month higher, while equities in other regions declined. U.S. and Japanese equities lagged other regions.
After hitting a new record high of 5,254 at the end of March, the S&P 500 fell nearly 5.5% through April 19, falling back below the 5,000 mark after a six-session losing streak, before regaining strength towards the end of the month. Big U.S. tech companies mostly pulled back. April also marked the start of the earnings season.

Bond markets: bond markets in retreat

The market’s shift in rate cut expectations following a higher-than-expected U.S. inflation report weighed on bonds. The market has moved away from last month's high confidence of a triple Fed rate cut in 2024 (starting in June) and turned to the idea that the Fed may only ease monetary policy by 25 basis points later in the year. The Fed's speech during the month continued stress that patience is needed and that the central bank is waiting for greater confidence that inflation will reach the target.

Central banks: a little more patience before rate cuts

At its April meeting, it was almost certain that the European Central Bank would leave interest rates unchanged. The ECB dropped the statement that rates must remain at their current levels "for a sufficiently long period of time". The Bank will update its forecast in June. Lagarde revealed that "some" members of the Governing Council would have supported a rate cut as early as April. As for the Fed, it noted little progress on the inflation front at its May 1st meeting. The Fed chairman, however, indicated that the Fed was unlikely to raise interest rates again.

Currencies: Yen depreciation

The yen hit its lowest levels since 1990 (which may have triggered central bank intervention at the end of the month). The depreciation of the yen is due to the unfavorable evolution of the long-term interest rate differential between Japan and the United States. Last month, long-term rates rose in the US, making the dollar more attractive.

Commodities: rising prices

Gold prices appreciated at the beginning of the month due to geopolitical uncertainty, then erased some of its gains in the second half of the month, as rising long-term interest rates were a drag on the yellow metal, and the geopolitical situation did not deteriorate further. All in all, gold prices ended the month up nearly 3%. The price of copper jumped more than 15% in April. Nickel and aluminum prices also rose over the month. This increase in the price of industrial metals follows a context of limited supply and can also be partly explained by the new sanctions against Russia. No Russian metal produced from April 13 onwards will be able to be delivered to the LME (London Metal Exchange) nor the Chicago Mercantile Exchange (CME). The U.S. also bans Russian imports of these three metals.

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