Dollar slowed down its momentum but US shares continue to rake in gains – Month in Review: February 2024
Macroeconomic Environment Review
The first half of February saw the US Dollar index climb nearly 2% as investors grew less optimistic about the Federal Reserve cutting interest rates. This rally peaked on February 13th with higher-than-expected US inflation data. Since then, the DXY has steadily weakened. Among major currencies, the Euro, British Pound, and Swedish Krona have shown the most strength, while the Swiss Franc and Japanese Yen lagged behind. This interplay in FX markets reflects two competing forces. On one hand, signs of a global economic recovery and positive corporate news are boosting investor risk appetite. However, the US economy’s continued strength and disappointing inflation numbers are prompting the Fed to remain hawkish, keeping the US Dollar relevant as a safe haven.
At the same time, in light of strong corporate earnings, particularly from major technology companies, US stocks experienced continued gains in February. Gains were concentrated in consumer discretionary and industrial sectors, while defensive sectors lagged behind. This came after the Federal Reserve held interest rates steady at 5.25-5.5% and hinted no rate cuts in the immediate future. Job growth exceeded expectations, while inflation ticked down slightly. However, core inflation remained unchanged, suggesting ongoing price pressures. Additionally, political primaries began heating up with Donald Trump securing victories in key Republican races, and the political landscape is poised to play a larger role in future market movements.
Monthly Performance Review
During February 2024, AENAON Syncro Strategies generated the following total returns net of fees:
Across the spectrum of our benchmark indices, our strategies’ performance during February was rather mixed. As a comparison, the US S&P 500 equities index gained 5.17%, the Barclay Hedge Fund Index posted a 2.07% advance, the Barclay CTA Index added 1.77% while the other benchmark indices can be seen on the chart below.
Chart 1: Monthly Performance vs. Benchmark Indices – February 2024
Charts 2, 3 and 4: Inception-to-Date Performance vs. Benchmark Indices
You can always review our updated factsheets at the following Fundpeak links, with monthly performance updates and statistics since inception:
