Executive Summary
April 2024 turned out to be a sour month for global markets, especially the S&P 500 index, which tanked 4.2%. It is also the first negative month so far in 2024, probably setting a new trend with a confusing macro back drop. In the past Fed rate hikes since the 1950’s, markets have always reacted negatively as high interest rates tend to affect business operations, borrowing, investments, etc. However, this time around, despite Fed jacking up rates from zero to 5.25% between 2020 and now, markets kept marching ahead on the back of a strong U.S. economy, low unemployment, and record stimulus. Looking ahead, higher for longer will certainly bite companies and therefore stock markets. However, there is no visible sign of this so far for the US and other developed markets. For GCC markets, oil prices will be a key determinant.
