Issue link: https://info.seic.com/i/1522288
Executive Summary • May saw a recovery for most markets after an April where the reality of "higher for longer" interest rates set in, to the detriment of returns. U.S. equities, specifically technology stocks, once again led the way and pleasingly all major fixed income markets were positive as well. • The key news story was UK Prime Minister Rishi Sunak calling for a snap general election to take place on Thursday 4 th July. The political data analytics firm YouGov have Keir Starmer heading to Downing Street with a historic majority of 194 seats in their initial projection. • The Eurozone came out of recession after two negative quarters to finish 2023 as manufacturing bucked its downward growth trend in May and crept back towards expansion (Eurostat). Economic Factors Interest Rates • Mixed economic data continued to affirm that major central banks should hold interest rates where they are for the time being. We do however expect divergence across countries soon, particularly as the U.S. tackles a larger inflation problem than most. Inflation • Wage pressures and housing costs continue to stop inflation from falling back to pre- pandemic levels, with prices seemingly stabilising at current elevated levels. Economic Growth • Economic growth surprised to the upside in May, picking up in the UK and Europe. The U.S. remains the driving force for global growth but is starting to show signs of fatigue. Tactical Views Commodities • Geopolitically driven supply shocks and fluctuating global demand remain a constant feature of markets. Optimism remains for the longer-term outlook, with global commodity demand continuing to increase at a faster rate than supply. U.S. Large Cap Equities • "Big Tech", led by NVidia, accounted for 56% of the U.S. equity market returns in May, as artificial intelligence optimism joined up with strong earnings reports. Forecasts for the rest of the year suggest some deceleration for technology and reacceleration for the rest of the market. Legend SEI's Current View: Direction of movement from previous: SEI Monthly Update. May 2024 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 Pessimistic Optimistic