Issue link: https://info.seic.com/i/1518700
Executive Summary Several global markets hit all-time highs in Q1, including the U.S. S&P500, the Japanese Nikkei 225 and the European STOXX 600. Additionally, certain sectors like technology and healthcare saw remarkable gains, reflecting investor optimism despite ongoing economic and geopolitical challenges. AI mania once again helped U.S. stocks to lead the major asset classes around the world, with all other major equity markets delivering positive returns. Conversely, corporate and government bonds continued their sluggish start to 2024, whilst commodities had a modest rebound. China began showing the green shoots of recovery off the back of more supportive government policies. Whilst official figures indicate modest government spending, aggregating local and central government policies puts spending figures over 8% of GDP, 1.3% higher than 2023 (Oxford Economics, 2024). Economic Factors Interest Rates Markets dropped their expectations for the number of interest rate cuts in 2024 as major central banks held firm in Q1, however all hinted that cuts were coming. Inflation Core inflation remains elevated and while labour markets are starting to weaken, there remains strong wage pressures. Economic Growth The U.S. remains the locomotive for global economic growth. Other economies trying to catch up are seeing some improvement; in particular, European sentiment is improving slowly. Tactical Views Commodities Potential supply shocks remain ever-present (Ukraine, Middle-East, China rebound) and a stronger than expected global economy gives a backdrop for rising commodity prices. U.S. Large Cap Equities Magnificent 7 technology stocks have disintegrated. NVidia and Meta surged incredibly in Q1 whilst Apple slumped and Tesla posted the worst returns in the S&P500 (Bloomberg, 2024). Legend SEI's Current View: Direction of movement from previous: Pessimistic Optimistic SEI Monthly Update. March 2024 – Q1 This is a marketing communication For use by advisers of regulated intermediaries in the UK in acceptance with all applicable laws and regulations Pessimistic Optimistic Pessimistic Optimistic Pessimistic Optimistic Pessimistic Optimistic