February marked the fourth month in a row that brought positive returns for the global equities. Shares were buoyed by continued strength in the US economy and relatively strong earnings reports, along with some optimistic signs of an increase in European activity. The MSCI All-Country World Equity index rose in February, adding more than 4% (in USD) to its recent strong performance. Many indices currently hover at or near their all-time high values, and have generated positive results in seven out of nine weeks in 2024 so far. Consumer discretionary and information technology stocks led the rise during the month. Utilities and real estate lagged and – along with materials – are the only sectors with losses in 2024 up to date. Emerging markets continued to lag compared to their developed markets counterparts, despite the hefty 8% rise in Chinese stocks in February (thanks to a government asset buying program and new limitations on short selling). In Japan the Nikkei225 index finally surpassed its all-time high level that was set almost 35 years ago, making it one of the longest recovery periods in the history of financial markets. Bond markets suffered because news of economic resilience and stickier than expected inflation (in both Europe and US inflation surprised on the upside) meant that central banks might refrain from interest rate cuts a little longer. Fixed income instruments yields increased (meaning that their prices fell) as investors adjusted for the diminished likelihood of imminent rate cuts – the Bloomberg Global Aggregate Bond index lost 1.3% (in USD) over the month.
       US equity indices advanced strongly in February, also extending their positive streak to four consecutive months. The broad S&P500 index climbed more than 5%, having pushed its record level higher eights times during the month. Since the end of last October, the index’s cumulative return is already over 21%. All 11 sectors chalked up positive returns for February, led by communication services. The risk-on mood propelled the consumer discretionary and indistrials sectors also among the leaders, while defensive sectors underperformed. The market’s ascend was aided further by the ongoing earnings season – with over 90% of S&P500 firms having reported, nearly three quarters have beaten analysts’ earnings forecasts. Inflation in both Europe and the United States continued to subside, putting more pressure on central banks to reduce interest rates, but the case for near-term rate cuts was complicated by data releases which demonstrated the economy’s strength (robust labor market and activity growth). As investors dialed back some of their enthusiasm for immediate rate cuts, bond yields increased. Thus, US Treasuries came under pressure, falling 1.3% over the month, while less rate-sensitive high-yield bonds outperformed.
European stock markets also advanced but underperformed compared to US markets. The broad pan-European index STOXX600 added 1,8% in February, also for a fourth positive month.  Among the top performing sectors were consumer discretionary, industrials and information technology. Within consumer discretionary the gains came from both luxury goods and automotive companies – two industries in which Europe traditionally has world leading firms. Within information technology, demand was driven by enthusiasm around the potential of AI. The sectors that lagged were those which rallied in late 2023 on hopes of forthcoming rate cuts – utilities and real estate, again. Headline inflation in the currency block fell to 2,6% in February (from 2,8%); while excluding the volatile food and energy prices, core inflation fell to 3,1% (from 3,3%). Еuropean government bonds retreated over the month, due to cold remarks by ECB, with German Bunds dropping 1.4%. However, there were also some signs of improving business activity, as Eurozone purchasing managers’ index (PMI) rose more than expected in February to 48.9 (an eight-month high), fueling hopes that the worst of the continent’s growth weakness is perhaps over. Such positive news helped to tighten the spreads between Italian and German sovereign debt. 
        In contrast to the strong performance of international markets, the second month of the new year did not bring good performance for the Bulgarian stocks. The BSE indices barely managed to stay in the green: the flagship SOFIX rose by tiny 0.2% for the month, while the broad BGBX40 index remained unchanged. During the month, the initial public offering (IPO) of insurance innovator Boleron AD was successful, raising over BGN 3 million. This was the first IPO of the year on the beam market. For the month, the best performer among Bulgarian companies was the sports betting organiser Telematic Interactive Bulgaria AD, whose price rose by nearly 12%, and the worst - the commercial bank First Investment Bank AD, whose share price fell by over 15%.