Author — Martin Young, CEO of Farringdon Asset Management

Global Macro Review

• Major markets pulled back from all time high levels.

US Markets

• US GDP growth slowed down last quarter on soft consumer spending.
• Economy expanded 1.3% vs estimate of 1.6%.
• Real disposable incomes have risen only modestly over the past year.
• The saving rate now stands at a 16-month low as households have exhausted the extra pile of cash they received from the government during the pandemic.
• In turn, many Americans are increasingly relying on credit cards and other sources of financing to support their spending.
• The dip in April consumer spending reported Friday and the recent downward revision to the government’s estimate for gross domestic product in the first quarter provide convincing evidence the US economy is coming off the surprisingly strong pace it set in 2023.
• Farringdon view on increasing debt levels will have a big negative impact on the market mid to long term. Should there be no action taken to reduce the debt levels, it will be disastrous for the US economy and the value of the dollar will be impacted.
• Nvidia has announced a 10 to 1 stock split. This will be the second stock split in 3 years which will happen on 6 June 2024.
• Due stock split event, there may be chartings issues in broker platforms.

Commodities

• Oil valuations swung between gains and losses after OPEC+ set out a plan to restore some production as early as October, despite concerns over the demand outlook and robust supply from outside of the group.
• The Saudi Energy Ministry announced that oil production cuts will continue in full in the third quarter and then be gradually phased out over the following 12 months.
• Brent dipped below $81 a barrel and West Texas Intermediate traded under $77.

India Markets

• India stocks hit record high while Rupee valuations improved.
• Main driver is that citizens predict Modi winning a third term.

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The information contained in this document is for information only and should not be taken as a recommendation to buy or sell. Investors are reminded that past performance is no indication of future performance.