May turned out to be another strong month for financial assets. Equities led the way, with the Nasdaq Composite up 6.9 per cent, the S&P 500 up 5.0 per cent, the DAX up 3.2 per cent, the CAC up 1.6 per cent and the Tokyo Stock Exchange Index up 1.1 per cent. There was a welcome broadening of performance across the size of bands in the UK. The FTSE All-Share Total Return Index was up 2.4 per cent, but within that, the FTSE 100 returned 2.1 per cent, the FTSE 250 4.2 per cent, the FTSE Small Cap 6.2 per cent and the FTSE Aim 6.1 per cent. Further corporate activity helped small and mid-caps, with a notable bid for Keywords Studios (KWS) at a 70 per cent premium to the share price the day before the announcement of the bid. At last, one of my positions, Hargreaves Lansdown (HL.), was subject to an approach at 985p.
Commodities performed well, with other industrial metals playing catch-up with the robust performance of copper. Having peaked at a 12-year-high on 20 May, copper gave up some of its gains to end the month up 0.5 per cent. Platinum gained 9.6 per cent, aluminium 2.4 per cent, zinc 2.0 per cent and nickel 1.6 per cent. Copper is set to go higher before the end of the year as the supply struggles to keep up with demand caused by the electrification of energy use around the world. What I have been banging on about for nearly three years is coming to fruition, just as I partially lost my nerve earlier this year. Patience is a virtue when investing.
Bonds also performed well over the month, with the US Treasury 10-year and the UK Gilt 10-year yields dropping slightly. Nervousness remains over the path of interest rates, but confidence is increasing that moderating inflation will allow rate cuts in the second half of 2024. Germany was an exception, where the yield on the 10-year Bund rose to 2.7 per cent, its highest since last November.