We’re four months into 2019 and so far this year markets have been flying. The FTSE 100 index is currently enjoying its most prosperous start to the year since 1999, having gained over 10%, while the S&P 500 index has amassed +17.51%, making it the best start to the year for US equities since 1987. However one of the biggest increases so far this year belongs to oil. The commodity has surged over 35% in the last four months, with the latest jump in price resulting from expectations of a shock to supply.
Debenhams has become the latest high-profile victim of the high street decline, having collapsed into administration. The action wiped out all shareholders, including, notably, Sports Direct founder Mike Ashley, who had invested at least £150 million into the store. Around 50 of the 165 Debenhams stores in the UK are expected to close under plans to revive the chain, with 22 stores already announced to be closing by the end of 2020.
A full round-up of April market performance
In the UK, the FTSE 100 index gained 2.33%, while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index, returned +4.40% and +4.53% respectively. In the US, the S&P 500 index climbed +4.05%, while in Europe the Eurostoxx 50 index gathered +5.47%. Japanese stocks measured by the Topix index gained +1.65%.
Emerging market returns were also positive. The MSCI Emerging Markets index gained +2.58%. Chinese equities measured by the MSCI China index lifted +2.19% and Latin American equities, measured by the MSCI Latin America index, put on +0.94%. Indian stocks measured by the IISL Nifty 50 PR index rose +1.07%.
In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, declined -1.52% and long dated (over 15 years to maturity) gilts sank -2.54%. European corporate bonds, measured by the Markit iBoxx Euro Corporates index, increased +0.71% while sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, moved +0.08%. In the high yield market, the Bank of America Merrill Lynch Euro High Yield index and the Bank of America Merrill Lynch Sterling High Yield index grew +1.37% and +1.80% respectively.
Commodities had a mixed month. The S&P GSCI index, which consists of a basket of commodities including oil, metals and agricultural items, climbed +2.85%. Oil had yet another positive month as the price of a crude oil contract gained a further +6.02%. However the precious metals saw negative returns as the S&P GSCI Gold and Silver indices dipped -0.77% and -1.22% respectively. In the agricultural markets, corn and wheat declined -1.02% and -7.50% respectively.
In the currency markets, the pound ended the month fairly flat, having gained 0.01% against the euro and lost -0.02% versus the US dollar.
James Timpson CFA, BSc (Hons), IMC
(All the above returns are reflected on a local currency basis i.e. they do not factor in any relevant currency movements. Unless accompanied by PR (Price Return), they do include income).
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