2024 was characterised by stronger economic growth than expected, inflation falling but remaining above policy targets, the rate cutting cycle starting, but later and more cautiously than expected, geopolitics continuing to disrupt, although not derail, markets, and US exceptionalism to the fore. Equities, dominated by the US and especially its
For the second year in a row, global equities are on course for double-digit gains, far out-pacing returns from bond markets. So far this year, only gold of the major asset classes has outshone equities, with a gain of close to 30%. Within equities, the US has become all-dominant, driven
“The immediate market reaction following the election result was much more muted than 8 years ago, with moves mostly continuing the pattern of recent trading but volatility subdued” This monthly commentary capture the result of the US Presidential election on 5 November, and provide some comments on its implications. At
The key moment in the global monetary policy cycle finally arrived in September, the US Federal Reserve (Fed) delivering its first interest rate cut of this cycle, the only surprise element being its size at 50bps. Other major central banks, including the European Central Bank (ECB) and Bank of England,
By the end of August, the big correction in markets in late July/early August seemed a distant memory, with markets quickly regaining most of the ground lost in that sudden and very brief risk-off event. Most asset classes and markets ended August in positive territory, with the MSCI World index
On the surface, markets appear to have been uneventful in July, with few sizeable moves over the month - the S&P 500 index was up 1.2%, MSCI World index of developed markets +1.8%, emerging markets +0.3%, and US Treasuries +2.1%. The most notable moves were in currencies, with the yen
In a reversal of the April sell-off, equity and bond markets generally performed well in May. The MSCI World index of developed markets gained 4.5% while US Treasuries returned 1.5% and Global Government bonds 1.0%. The US equity market led the way, +4.9%, with tech dominant. The Nasdaq index returned
The key factors driving markets in the first quarter of the year continued through April. Economic growth has remained resilient, labour markets strong and the earlier falls in inflation have slowed. The long period of high inflation, aggressive monetary tightening and geopolitical uncertainty have not damaged economies as much as
Three critical connected factors drove markets in Q1: economic activity across the developed world surprised on the upside; inflation proved to be more persistent; and labour markets remained tight. The probability of recession has fallen, that of a soft landing increased. As a result, market expectations for cuts in policy