Economic market update

Market performance (and equity markets) were significantly boosted by investor confidence in the global economy through May.

The MSCI World ex-Australia (Hedged) rose by 4.1%, however the MSCI Emerging Markets (Unhedged) fell by 1.8%.

USA flag

United States

The S&P 500 gained 4.9% in May. This was driven by strong corporate earnings, especially in the Information Technology sector, due to demand for AI-related technology.

Federal Reserve Chair, Jerome Powell, indicated the potential for interest rate cuts later in 2024, following the May meeting. Expectations in the market shifted to a single rate cut in the USA in December.

European Union flag

Europe and the UK

The MSCI AC Europe Index increased by 2.5% in May. The real estate and utilities sectors led this. Investor anticipation of a rate cute at the European Central Bank June meeting also buoyed this increase. Financial sectors also performed well, while energy and consumer discretionary sectors were weakest.

UK equities also saw gains, driven by strong performance in the financials and industrials sectors.


In China, the MSCI China Index increased by 2.5% over the month. Policymakers took steps to stabilise the economy (particularly the housing market) amid slow improvements in economic data. However, the US announcement of new targeted tariffs on specific Chinese imports, including electric vehicles, impacted on sentiment.

Australian flag


The ASX300 posted a modest gain of 0.9% for May. There were mixed results across different market sectors. For example, the Information Technology sector delivered 4.5%, Utilities sector delivered 3.4% and the Telecommunications sector delivered -2.8%. The Reserve Bank of Australia kept the cash rate at 4.35%, again signalling caution that inflation remained a threat.

Money bag flag

Currency and Bonds

The Australian 10-year bond yield remained flat, decreasing by 1 basis point to 4.41% for the month. Meanwhile, the US 10-year government bond yields decreased by 19bps to 4.49%. The discrepancy is partly linked to differing inflation trends, with Australian inflation exceeding expectations.

Anticipation of central banks reducing interest rates led to declining bond yields.

The Australian Dollar appreciated against most major currencies, rising:

  • 0.9% against the Euro
  • 0.7% against the Pound Sterling
  • 2.3% against the Japanese Yen.

The Australian Dollar weakened by 1.4% against the New Zealand Dollar.

Read the Market Commentary for April 2024.

Come and talk to us

Get your super sorted with a face to face consultation.

No cost. Start growing your super today.