Market Update June 2024

 by Mike Ross

Global Share Markets

Global share markets performed strongly in June, with a 2.9% return in NZ dollar terms and a 2.4% return in NZ dollar hedged terms. This robust performance was primarily driven by significant gains in the information technology sector, which surged 10.%, led by Nvidia, Microsoft and Apple.

 Over the past 12 months, global share markets have risen more than 20%, significantly contributing to overall investment portfolio performance.

NZ Shares

The NZ share market fell by 1.3% in June. Local economic data continued to be disappointing, with forecasts indicating a contraction in the June quarter and a drop in job advertisements. The NZ listed property sector also struggled, declining 3.2% for the month.

Over the past year, the local market has declined by 1.7% and has delivered only a 2.2% annual return over the past five years. For the local market to recover, we may need to see an improvement in company earnings or a reduction in interest rates, the latter of which seems to be approaching.

Bond Markets

Bond markets performed positively, with the NZ bond market rising 1.1% and global bonds by 0.9%. U.S. 10-year government bond yields decreased by 0.1%, ending at 4.4%, while NZ's 10-year yield fell by 14 basis points to 4.7%. These movements reflect ongoing global monetary policy adjustments, with the U.S. Federal Reserve potentially considering rate cuts due to lower-than-expected inflation.