25 Mar 2025 - Glenmore Asset Management - Market Commentary

Globally, equity markets were weaker in February. In the US, the S&P 500 declined -1.4%, the Nasdaq fell -4.0%, whilst in the UK, the FTSE was bucked the trend, rising +1.6%. Domestically, the ASX All Ordinaries Accumulation index performed poorly, falling -4.0%. On the ASX, the top performing sectors were utilities and consumer staples, whilst technology and real estate underperformed.

During the month, the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points (bp), the first reduction in four years. Whilst the move was positive for equity markets, it was largely expected so had minimal impact in February.

Comments for RBA Governor Michele Bullock that bond markets have been too bullish in their hopes with regards to the number of further rate cuts in 2025 had a significantly more negative impact on sentiment, though we continue to believe additional rate cuts will occur over the next 12-24 months. Bond yields declined modestly in February. The US 10-year government bond yield fell -6.6 basis points to close at 4.24%, whilst in Australia, the 10-year bond yield fell -13bp to close at 4.30%.