Harbour Investment Outlook: Markets rebound amid trade uncertainty

 

Key market movements

Global equities rebounded strongly in May, posting a return worthy of top decile historically, at 5.1% in unhedged NZD terms, and 5.6% NZD-hedged. Broadly, most sectors were positive, with healthcare an outlier at -3.7% and information technology leading the pack at +10.3%.

Locally, the New Zealand equity market also bounced back with the S&P/NZX 50 Gross Index (including imputation credits) delivering a 4.3% return, whilst Australian equities also performed well with the S&P/ASX 200 Index up 4.2% (4.1% in NZD terms).

NZ bond returns were negative in May (-0.4%), measured by the Bloomberg NZ Bond Composite 0+ Yr Index. Global bonds also had poor performance with the Bloomberg Global Aggregate Bond Index (NZD-hedged) returning -0.4%. After a volatile month for US Treasury Bonds the 10-year yield had increased 24bps to 4.40%. New Zealand 10-year yields ended at 4.57% after a smaller increase.