Global Markets Review

World markets ended 2024 on a mixed note as inflationary concerns and the impending Trump presidency loom in 2025.

US markets were the Grinch who stole Christmas in 2024 as they handed investors lumps of coal with the S&P 500 ending 2.5% lower in December, the Dow weaker by 5.3% (its weakest December since 2018), while the Nasdaq edged marginally positive, ending the month higher by 0.5%. 

US Economic data for November saw the inflation number (CPI) rise to 2.7% YoY, with core CPI, which excludes energy and food, printing at 3.3% YoY. The Fed’s preferred inflation gauge, personal consumption expenditure (PCE), printed at 2.8% YoY in November, unchanged from the October print. At its final meeting of 2024, the US Federal Reserve again cut rates. Fed Chairman Powell indicated the potential for two further rate cuts of twenty-five basis points in 2025, with inflation potentially remaining sticky.  Powell’s   comments were more hawkish than the market expected, contributing to the softer close in December. The hawkish tone also resulted in a spike in US rates, which supported the US dollar.

UK markets ended December lower by 1.4%, reversing gains made in November. Inflation for November rose to its highest level in eight months, rising to 2.6% YoY, vs the 2.3% YoY print of October, while core CPI also printed higher at 3.5% YoY, up from the 3.3% YoY October print. On the policy front, the BoE kept rates unchanged with a 6-3 vote.

Major European markets ended the year on the front foot as both the Cac and Dax ended December higher by 2.0% and 1.4%, respectively. Headline inflation for the eurozone for November, printed at 2.2% YoY vs the 2.0% YoY print in October. Like its US counterpart, the European Central Bank also cut rates by twenty-five basis points, the fourth time in 2024, bringing its benchmark rate to 3.0%, while expressing concern about economic momentum against the backdrop of the ongoing political uncertainty in France and Germany. 

Asian markets ended December in the black as the Chinese stimulus measures introduced in September appeared to largely overcome persistent economic concerns. In China, both the Hang Seng and Shanghai composite were firmer by 3.3% and 0.8% respectively. Chinese inflation for November printed at a five-month low of 0.2% YoY compared to October’s 0.3% YoY. Core inflation accelerated from the October print of 0.2% to 0.3% in November. Chinese manufacturing PMI in December continued its positive, printing at 50.1 compared to the November print of 50.3, while the official non-manufacturing PMI number rose to 52.2, compared to the November print of 50.0. Note that the 50-point mark separates contraction from expansion.

The Japanese market ended December stronger, up 4.4% and on the economic front, Japanese inflation in November showed a marginal increase from the October number, indicating potentially a sustained uptick, which could result in the Bank of Japan (BoJ) raising rates early in 2025. However, the BoJ kept rates unchanged at its last meeting of 2024, remaining cautious about the economic outlook for 2025.

South Africa

Local markets closed lower by 0.5%, as resources continued to decline, with the resources index lower by 5.9%. This softening was on the back of weaker miners, especially coal miners. Other sectors produced a mixed bag, with industrials up by 2.2%, property down by 0.1%, and financials down by 1.6%. 

Standout shares for the month on the upside were Barloworld, up 27% on the back of corporate activity, Tiger Brands up 14%, MTN up 14%, Richemont up 11.5%, while Impala was down 14%, Sibanye down 16%, and Northam down 13% conveying the weaker commodities theme.