Market Update May 2024: on the stock markets the sun did shine

• May was a good stock market month
• ECB cuts interest rate by 0.25%
• United States inflation remains relatively high

May was a good stock market month 

While April was still a tough month for stock markets, they recovered in May. The returns of the four Peaks portfolios were in the plus: from +0.6% for Cautious to +2.0% for Adventurous. That makes 2024 an excellent stock market year so far, with returns well above what we predicted for the Peaks portfolios. 

Table 1: Net returns of the Peaks portfolios

Good to know: These are the net returns of the Peaks portfolios for the previous month, the year-to-date, and since the start of Peaks; after deducting Peaks’ fees, fund costs, and transaction costs. The value of your investment may fluctuate. Past performance is not indicative of future results.



The table above shows returns for a portfolio of €10,000. The returns do not take into account any deposits or withdrawals made during the month. If you have deposited or withdrawn money this month, your personal return will differ from the figures shown above. Additionally, your personal return will vary if you have invested less or more than €10,000 due to the monthly fixed costs charged by Peaks.

Looking at risk, 2024 has so far been a ‘calm’ stock market year - without too big fluctuations. Returns are swinging back and forth less than average. 

Table 2: Risk of the four Peaks portfolios

ECB cuts interest rates by 0.25%

Despite everything going on in the world, the European economy is doing quite well. In the first quarter of 2024, the European economy grew by +0.3%, after a period of slight contraction in the second half of 2023 (+0.1%). Growth was also broad-based, with all major countries in Europe showing positive figures. 

At the same time, inflation in the eurozone is relatively low at 2.4% year-on-year when compared to the United States (3.6%). This is the reason for the European Central Bank (ECB) to cut deposit rates (the interest rate banks get when they deposit money with the ECB) by 0.25%, from 4% to 3.75%. This should give an extra push to economic growth, as it will make borrowing money a little cheaper and saving a little less attractive, thus getting more money rolling in. 

Interest rate on Peaks Interest Account also drops slightly

The ECB's new interest rate will take effect on Wednesday 12 June. Because the interest rate on the Peaks Interest Account is linked to the ECB rate, the interest rate on your Peaks Interest Account will also go down by 0.25% on the same day. The new interest rate you get on the Peaks Interest Account will then be (indicatively) 3.14% for package Start, 3.24% for package Complete and 3.39% for package Premium. 

United States inflation remains relatively high

In the United States, inflation fell from 3.5% to 3.4% year-on-year in May. That in itself is a good sign, but inflation is still (much) higher than the US Central Bank (the Fed) would like to see. An interest rate cut is therefore not in the cards in the US, at least not in the short term. Perhaps it will happen later this year when inflation declines further. 

On the positive side, the US economy is performing reasonably well and companies are reporting good figures. As a result, stock markets are breaking new records: for instance, the famous ‘Down Jones’ index reached the milestone of 40,000 points in May! 

Table 3: Net yields of the index funds included in the Peaks portfolios

Good to know: These are net yields of the index funds in which you invest with Peaks in May 2024, for the entire year 2024, and since the start of Peaks, after deducting Peaks costs, fund costs, and transaction costs. The value of your investment may fluctuate. Past performance is not indicative of future results.