December 2024 Quarterly Market Update
Read our latest market and economic update for the fourth quarter of 2024
Key points:
Equity Markets Close Off a Great Year for Investors: Despite a subdued end to the year and a Santa rally not materialising as hoped, US markets posted impressive gains in 2024.
U.S. Rate Cut Expectations: In December, the Federal Reserve gave us a 25 basis point cut; however, markets were taken aback by Jerome Powell’s comment suggesting there will only be two 25 basis point rate cuts in 2025, compared to the four previously mentioned.
Bond Prices Fell: Global fixed income markets declined in the final quarter with a sharp rise in yields, which was influenced by Trump's election victory creating inflation concerns, Jerome Powell suggesting there will be fewer rate cuts than previously expected in 2025, and strong economic data from the US combined with persistent inflation.
US Dollar Rally: The US dollar strengthened significantly in the last quarter of 2024, driven by Donald Trump's election victory, expectations of less aggressive rate cuts by Jerome Powell, and slower growth in the UK, EU, and China making the US relatively more attractive.
Sector Performance: AI/Tech outperformed once again. In 2024, the Magnificent Seven accounted for over 50% of the total S&P 500 return.