Market update (02/24): Tech giants on the rise with inflation under observation

In this update:
- Tech giants move the markets
- What about inflation and interest rates?
- Selma is investing a bit more cautious 

Tech giants move the markets

In February tech giants like Microsoft and Nvidia shined, driven by the boom in artificial intelligence and pushed the performance of US indices like the S&P 500. Also the Japanese stock market, which has a large weight in the IT sector, has reached new heights which we have not seen since the 1990s. Both the US and the Japanese market are integral components of Selma's investment accounts, and their robust performance has  positively impacted the value of Selma portfolios.

What about inflation and interest rates?

The topic that currently moves the markets the most is the outlook for inflation and its impact on the interest rates – the markets expected inflation to be under control and thus interest rates to go down in 2024. This expectation has helped the stock market because lower interest rates are good for the economy, thus decreasing interest rates would also aid in recovering the prices of real estate and bonds (loans to companies and governments.)

However, in February we saw some numbers showing that inflation might not be cooling off as quickly as hoped – so this remains definitely an important topic to watch while the year continues.

Assessment of the financial markets and Selma's reaction

In general, the financial markets around the world had a strong year-end and a good start into 2024. This has made markets a bit more expensive without the company profits increasing with the same speed. Thus Selma is becoming slightly more cautious with investments in equity markets, while still keeping an overall optimistic outlook. 

True to our investment approach, we believe that in this market environment, it continues to make sense to invest diversified and to keep a long-term view: Trying not to get distracted by ups and downs in the market is important when following a long-term investment strategy.