This publication provides a monthly review of major indexes, important macroeconomic indicators and an overview of the highs and lows of the stock market for the period.
Summary
Global:
- Global equities surged over the month, supported by continued strength in technology shares and the ceasefire extension. The S&P 500 reached record highs, though gains were led by emerging markets, with the MSCI Emerging Markets Index rising 9.5% (USD), driven by strong AI-related growth across Taiwan and South Korea. Developed markets also delivered solid returns, with the MSCI World Index up 4.6% (USD), underpinned by resilient corporate earnings.
- Oil prices declined meaningfully from USD 118 to USD 91 per barrel (decline of 22.8%) amid an extension of the truce in the Middle East. Gold fell by 1.5% over the month and holding steady around $4,500.
- US-China relations showed signs of improvement following a positive engagement between the respective Presidents, with indications of enhanced economic cooperation between the world’s two largest economies.
- US inflation (CPI) increased to 3.8% from 3.3%, well above the Fed’s 2% target, reflecting ongoing price pressures, particularly from technology, energy and wages.
- Kevin Warsh was formally sworn in as Federal Reserve Chair, marking a transition in US monetary policy leadership. First chair to be sworn in at the White House in more than a decade, raises concerns of independence.
- The US unemployment rate remained unchanged at 4.3%. While job creation continues and layoffs remain contained, hiring momentum has moderated, pointing to a more balanced but increasingly fragile labour market. Beyond the US, several large European companies continue with wide-spread lay-off’s.
- The IMF revised its 2026 global growth forecast down from 3.4% to 3.1%, reflecting the impact of Middle East tensions, higher energy prices, and tighter financial conditions.
Local (South Africa):
- Local bonds outperformed equities over the month, with the FTSE/JSE All Bond Index returning 2.9%, compared to a -0.3% decline for the FTSE/JSE All Share Index (ALSI). On a one-year basis, the ALSI is up 25.8% (ZAR), slightly trailing the MSCI World (28.0% USD) and lagging in rand terms (15.3%).
- The unemployment rate rose to 32.7% in Q1 2026 from 31.4% in Q4 2025, underscoring persistent structural challenges in the domestic labour market.
- Inflation accelerated to 4.0% from 3.1%, driven primarily by higher fuel prices linked to the Middle East conflict. Inflation is expected to average 4.7% in 2026 as second-round effects gradually feed through.
- The South African Reserve Bank increased the repo rate by 25bps to 7.0%, with the Monetary Policy Committee highlighting rising upside risks to inflation, including the oil shock, higher fuel costs, and an uncertain global environment. The outlook for medium-term policy rates remains dependent on a resolution of the conflict, but two further hikes are being priced into the market.
- The Rand strengthened by 3.6% against the US Dollar, from R16.83/USD to R16.22/USD, supported by improved global risk sentiment.
- Both Moody’s and S&P kept South Africa’s credit rating unchanged, with Moody’s revising the outlook to positive. This points to a potential upgrade if fiscal discipline is maintained, supported by stabilising debt and ongoing reforms in areas such as energy and logistics.