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Ark Review of the Month

March 2024

Global Markets


The global economy exhibited robust growth in the first quarter of 2024, laying a solid foundation for the full year. Global equity markets overall performed strongly, with Japan TOPIX index leading the market with a 18.1% surge in Q1. US S&P 500 index gained 10.6%, while MSCI Europe ex-UK index rose 9.7% and UK FTSE All-Share index advanced by 3.6% over the quarter.

In contrast to the equity markets, fixed income markets faced headwinds. As the prospects for aggressive rate cuts diminished, bond yields continued to rise, pushing prices down. Global investment-grade corporate bond prices declined by 0.8% in Q1. Among government bonds, US Treasuries and German Bunds both fell 1.0% in Q1, while UK gilts dropped by 1.8%.

As of 29 March 2024:

UK 10 Year Gilt Yield 3.94%
US 10 Year Treasury Yield 4.21%
Germany 10 Year Bund Yield 2.30%

UK Market

UK inflation eased to 3.4% in February, the lowest level since September 2021, and is projected to decline further in 2024. This raises the possibility of the Bank of England initiating rate cuts in the summer. The decline in inflation stemmed from lower energy prices compared to the same period last year and a moderation in food price increases in recent months.


The UK economy contracted slightly in the second half of 2023, with GDP slipping 0.1% and 0.3% in Q3 and Q4, respectively. However, early economic data for 2024 suggests this ‘technical recession’ may have ended. Monthly GDP in January 2024 grew 0.2% compared to December, and retail sales rebounded strongly. Despite these signs of recovery, the UK stock market underperformed many international peers in Q1, affected by value stock declines in addition to economic factors.

Ark Insights

The confluence of the US spring break, the UK Easter holidays, and the North American mega-eclipse in late March fuelled a surge in tourism demand in North America. US Federal Aviation Administration data showed peak-day flight volumes exceeding 50,000, reflecting robust consumer confidence and spending power.


However, strong consumer demand presents a new challenge for the Fed's fight against inflation. US Department of Commerce data indicated that personal consumption expenditures (PCE) grew 0.8% month-over-month in February, slightly below January's 1.0% but still the second-highest monthly increase since January 2023. Elevated consumer spending has supported strong US economic growth but also reduced incentives for businesses to lower prices, making it difficult to quickly reverse the trend of high inflation.


The macroeconomic environment has prompted a reassessment of market expectations for Fed rate cuts. By the end of 2023, the market generally anticipated the Fed to cut rates 6-7 times in 2024. However, as recent economic data improves, market expectations have shifted, suggesting the Fed may slow the pace of rate cuts, reducing the number of cuts to potentially three or fewer and delaying the start of the easing cycle until summer.


As always, our Investor Relations team would be more than happy to help you with any queries.


The views expressed in this update are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument. The views reflect the views of Ark Investment Management at the date of this document and, whilst the opinions stated are honestly held, they are not guaranteed and should not be relied upon and may be subject to change without notice. Investments entail risks. Past performance is not necessarily a guide to future performance. There is no guarantee that you will recover the amount of your original investment. The information contained in this update does not constitute investment advice and should not be used as the basis of any investment decision. Any references to specific securities or indices are included for the purposes of illustration only and should not be construed as a recommendation to either buy or sell these securities or invest in a particular sector. If you are in any doubt, please speak to us or your financial adviser as appropriate.

Issued by Ark Investment Management Ltd which is authorised and regulated by the Financial Conduct Authority. 

© Ark Investment Management Ltd. Registered in England & Wales with the company number 09281759.

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