Monthly Macroeconomic Report

MAY 2024
MACROECONOMIC REPORT

The report provides a detailed analysis of significant macroeconomic trends and developments in developed and emerging markets. It covers inflation, GDP, retail sales, industrial production, unemployment, yield curves, stock indices, interest rates, commodities, sector and industry dynamics, IPO and M&A deals,
new unicorns, and cryptocurrency performance.

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SUMMARY

Monthly
Macroeconomic Report
June 30, 2024

Key Rate and CPI , %

In May, inflation in the US and UK slowed to 3.3% and 2.0%, respectively. Despite this, the US Fed and the Bank of England kept key rates unchanged. Meanwhile, the ECB cut its key rate by 25 basis points to 4.25% for the first time since 2019, although Eurozone inflation rose from 2.4% in April to 2.6% in May 2024.

The central banks of China, Indonesia and Mexico adhered to the previously outlined policy, while the Central Bank of Brazil lowered the key rate by 25 basis points to 10.5%. At the same time, CPI showed growth in all the above-mentioned countries, except China.

The Department of Commerce's final estimate of US real GDP grew at an annualized rate of 1.4% in the first quarter of 2024.As of May 31, the US economy is expected to grow 2.7% in the second quarter. According to the IMF, China's economy may grow by 5.0% (4.6% according to the previous forecast) in 2024, as the first quarter results were stronger than expected.

Industrial production in developed countries 2 years, YoY, %

US retail sales in May declined to 2.3% year-on-year from 2.7% in April. China's retail sales rose 3.7% year-on-year to over 3.92T yuan ($540B), beating expectations of 3.0%. US industrial production rose 0.4% year-on-year, while capacity utilization in the manufacturing sector rose to 78.7% from 78.2%.China's industrial production rose 5.6% year-on-year, but manufacturing output growth slowed to 6.0%. Only 33 out of 41 industries reported production growth in May.

The US unemployment rate increased by 10 basis points for the second consecutive month and reached 4.0% for the first time since January 2022. The labour force participation rate fell from 62.7% to 62.5%, indicating a slight decline in the share of Americans working or looking for work.

Yield curves for May 2024, 2023, and 2022 years

The US Treasury yield declined in May. There was also a steady inversion of the yield curve. On May 29, the US Treasury launched a buyback program to provide market participants with a regular opportunity to sell Treasury securities that are out of circulation, older and less liquid. Under the program, the plan is to buy back up to $2B weekly through July 24.

The dollar index (DXY) fell to 104.62 by the end of May from 105.69 at the end of April. One of the basket currencies, the yen, fell to a 34-year low of 160.03 against the US dollar, with the Japanese Ministry of Finance intervening with $62.25B.

FACT

The stock market has grown. During May, the S&P 500 index rose by 4.80%,

the NASDAQ Composite by 6.88%, and the Dow Jones Industrial Average by 2.30%.

Dynamics of key stock indices, YTD

In May, all sectors of the US economy, except for Energy and Consumer Discretionary, demonstrated positive dynamics, and the most significant growth was shown by Utilities (+9%), Communications (+7%), and Technology (+7%). All industries of the US economy showed growth, except for Internet (-1%) and Software (-1%). At the same time, the leaders in growth for the month were Solar (+20%) and Clean Energy (+12%) industries.
The price of WTI crude oil fell by 5.1% in May and Brent by 5.31%, resulting in growth of 8.0% and 5.69%, respectively, since the beginning of the year. Prices could have been affected by concerns about the Fed's unwillingness to cut the key rate in the near future and the growth of crude oil inventories in the United States.
In May, the price of natural gas increased by 27.7%, offsetting the decline in the first quarter. Despite a slight increase in natural gas supplies in the United States, the price of natural gas began to rise rapidly due to a decrease in natural gas production, as well as scheduled and unscheduled maintenance work on gas pipelines and wells.
On May 20, the price of gold exceeded $2,449 per troy ounce, which became an absolute record. Among the reasons were investor concerns and increased demand for gold from the central banks of many countries.

Dynamics of energy commodities prices, YTD

In May, the number of IPOs in the US totaled 14 (-44.0% MoM) with an aggregate value of about $2.9B (-93.4% MoM). Globally, there were 120 (+12.1% MoM) IPOs valued at $6.7B (-85.7% MoM).
The number of M&A deals completed totalled 1,606 (-9.3% MOM)for $141.0B (+71.5% MoM), including 588 (-7.1% MoM) deals in the US for $115.8B (+135.5% MoM).

IPO dynamics in the USA, 2016 – 2024

M&A dynamics in the USA, 2016 – 2024

FACT

The list of unicorns was expanded to include 5 new non-public technology companies valued at more than $1 billion.

In the first 5 months of 2024, the price of the leading cryptocurrency increased by 59.16%, and Ethereum by 66.11%. At the same time, in May, the prices of the two leading cryptocurrencies increased by 12.96% and 27.94%, respectively. During the month, Bitcoin, as usual, actively responded to the publication of US macroeconomic data.

On May 16, crypto exchanges Binance, OKX, Bybit, Kucoin, Gate, Bitget, and Bitfinex announced the start of trading in the NOT token. After a week of trading, Notcoin grew by 76%. As of May 31, the token's capitalization was about $1.22 billion, and the trading volume reached $1 billion daily.

Dynamics of Bitcoin and Ethereum prices, YTD

Important notice: The figures presented in the reports for previous periods may be subject to subsequent backward-looking adjustments in later reports due to the delay in obtaining data on closed transactions and the possibility of their adjustments in the market intelligence systems used to extract deal data.