As we rapidly accelerate towards Christmas, it’s worth reflecting in our last weekly update of 2024, what happened to the markets this year. However, we will only give a short nod to this overview, for ‘what is done is done’. Our thoughts have been focused for some time on what we can expect in 2025 and beyond.
Investments, as we are obliged to state in accordance with FCA regulations, are a medium to long-term commitment. The principle is correct, as time in the market should see most people attain desirable gains. Yet increasingly, markets seem to be focused on the short-term with frequent rotations between assets and geography in tandem with the avalanche of news bulletins.
When we are looking forward, our comments aren’t predictions, but more an insight into the probability of certain assets performing well. In this fast-changing world, we can however guarantee that there will be frequent curve balls which may influence and change asset allocations in an instant. Part of our job is to understand the dynamics of the landscape and react when appropriate to optimise returns and protect on the downside wherever possible.
We are of the opinion that active managers will come into their own next year, in what may prove to be volatile times, although passive strategies with an active overlay will continue to form a core of our approach.
On this week’s agenda:
- Strong growth in 2024
- The outlook for 2025
- T Rowe Price
- JPMorgan Asset Management
- Goldman Sachs
- Everyone hates duration!
- OPEC cut oil demand
- China loosens monetary policy
- Book those European holidays now
- Summary
Strong growth in 2024
After spending much of 2023 expecting inflation and interest rates to fall, it was only in late 2024 that we saw a reduction in interest rates, with the Federal Reserve (Fed) finally lowering the rate on 18th September. It’s the first rate cut since March 2020. The European Central Bank (ECB) however was the first developed region to lower its rate in June 2024.
Equity markets responded positively to the Fed news and, even going into the tightly predicted US election, equities were still largely on the front foot. Voting Donald Trump into the White House by some margin was good news for most stocks as markets rejoiced in anticipation of less red tape, less onerous taxation, more stimulus, and greater optimism. Good news for business.
Continues…
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Our CEO, Gary Neild, writes engaging Market Commentaries every week. If you would like to receive the full version straight to your inbox every Friday, please join our communications list.
Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.