Global equity markets surged further ahead February, driven by strong corporate results and economic data from the US. With over 90% of S&P 500 firms having reported results so far this year, nearly three quarters have beaten analysts’ earnings forecasts. The US composite Purchasing Managers’ Index (PMI), released during the month, indicated that economic activity continued to expand over February and the US economy adding 353,000 jobs in January. Within equities, emerging markets performed well, up by 4.8% in US Dollars, over the month thanks primarily to a strong Chinese equity market rebound.

In contrast, fixed-income markets were broadly down, in US Dollar terms, over February. Fixed income markets came under pressure as investors continued to push out interest rate cuts further into 2024, as US inflation proves to be stickier than anticipated. As a result, shorter-dated fixed-income investments, like cash, performed better than longer-dated bonds.

The local equity market declined by -2.4% over the month. Despite a weaker Rand, which normally supports the Rand-hedged stocks, and a stronger Chinese market, local shares still struggled. Since the start of the year, local equities are now 15% behind global equities.