April Emerges as the Bleakest Month of 2024 on Wall Street

Wall Street faced significant upheaval in April of 2024, marking it as the bleakest month for investors within the year. Major equity benchmarks like the S&P 500 plummeted 3.4%, the Dow Jones Industrial Average mirrored this decline with a 3.4% drop, and the Nasdaq Composite underperformed with a 3.8% fall. The deceleration in markets was primarily attributed to the concerns about escalating interest rates, as investors grappled with high inflation and a sluggish growth trajectory for the U.S. economy. Additionally, geopolitical uncertainties hinted at sustained inflation in the short term.

Jerome Powell, the Federal Reserve Chair, underscored in the preceding month that the central bank would maintain its borrowing costs to combat persistent inflation, signaling a deferral in rate reductions. In his mid-April remarks, Powell accentuated the enduring challenge of inflation, suggesting a more extended period to achieve the Fed's 2% inflation target. The 'core' Personal Consumption Expenditures (PCE) Price Index, which excludes the volatile food and energy components, surged by 3.7% year over year in the initial quarter, surpassing the forecasts of 3.4% and climbing from a 2% hike in the prior quarter.

The first quarter also saw the U.S. economy expanding at its most lethargic rate in two years, attributable to subdued consumer and government expenditure in the face of rising inflation. The GDP grew at a sluggish 1.6% annual rate through January to March of 2024, failing to meet forecasts of a 2.5% elevation. The Conference Board's consumer confidence index also took a downturn to 97 in April, falling short of the anticipated 104 and sliding below March's 103.1 figure.

Whilst the Fed's rhetoric and economic indicators were pivotal in April's market trends, the latter part of the month was dominated by earnings announcements from prominent tech firms. The overarching sentiment from these reports spotlighted hefty investments in artificial intelligence (AI).

Top Performing ETF Sectors Amidst Market Downturn

Despite the market unrest in April, certain Exchange-Traded Fund (ETF) areas fared well.

Interest Rate Defense

The Simplify Interest Rate Hedge ETF (PFIX) observed an 18.7% rise, while the Global X Interest Rate Hedge ETF (RATE) appreciated by 13.6%. These gains coincided with heightened U.S. treasury yields, which started at around 4.33% and peaked at 4.70% towards the month's end.

Silver Miners

The Global X Silver Miners ETF (SIL) enjoyed a 16.6% advancement, and the iShares MSCI Global Silver Miners ETF (SLVP) closely followed with a 16.4% ascension. Boosted by geopolitical strife, silver's allure as a safe-haven asset burgeoned alongside its industrial demand driven by robust manufacturing data and growth in green energy infrastructure.

Copper

The United States Copper Index Fund (CPER) saw a 15.8% jump amid output reduction declarations from Chinese producers, AI-driven demand, and a global shift towards clean energy.

Turkish Investments

With local investors combating high inflation by channeling funds into equities, the iShares MSCI Turkey ETF (TUR) surged by 12.1%. Despite March's inflation reaching a staggering 68.50%, the Turkish equity market began strong.

Aluminum

The USCF Aluminum Strategy Fund (ALUM) climbed 11.1% due to supply constraints and revitalized manufacturing activities in major economies, along with the Western embargo on Russian metals.

April, WallStreet, ETFs