Market Update - 6th April 2024

Written by William Cooper

Domestic:

Quarter one of 2024 is now behind us, presenting the opportunity to reflect on market performances thus far, which can help determine who have been the big winners and losers. The ASX information technology sector has been booming off the back of great interest for artificial intelligence with the entire sector up 55% for the year. Economists are attributing the push to what they describe as an ‘AI Boom’, a concept which is not specific to only Australia but most major economies around the world. Property continues to show its resilience with strong recent data indicating demand for residential homes continues to grow despite high levels of interest rates. The large cap property equities are up 16.86% for the year, with REIT’s on the whole showing the strongest March performance at 9.3% growth. Financial sector showed 10.28% growth and consumer discretionary exhibited 11.05% growth for the quarter.

Most other sectors had relatively flat results over the March quarter, with the only real loser of the period being materials which are down 8.34%. The slump felt by mining companies is attributable to demand pressures due to lowered Chinese exports and general downturns in commodity prices. Interestingly, gold continues to surge, hitting a new all-time high and up 14.78% for the quarter, with similar feats being demonstrated by silver, which sits at $41.25 per troy ounce, within range of its previous all time high hit in 2011 of $43.63.

With easter just behind us it would be remiss not to have a look at cocoa prices, and the news might not be what people want to hear. Cocoa prices in 2024 have soared upwards over the past year and are up a whopping 230%. This is due to shrinking global supplies due to hindered production resulting from poor weather conditions in prime cocoa farming regions such as Ivory Coast and Ghana. These prices reflect the future contracts of the commodity meaning we won’t be seeing the effects of the price rises quite yet, but come next Easter, be prepared to break the bank.

International:

Out of the US the S&P500 is up 10.79% for the quarter which at close was the all-time high for the market and the Dow Jones up 5.55% and similarly hit record highs. The news of the Baltimore Bridge collapse should be well-known to most, but it should be hugely disruptive to the economy, rather, will limit its reach to that of the Baltimore region as well as certain industries such as the automotive. Inflation continues to move positively for the US, but the Federal Reserves chair Jerome Powell is happy with the state of the economy and is unlikely to lower rates within the next couple of meetings.