January 14th, 2025

Your November and December 2024 market update

During the final months 2024, markets experienced some volatility – but on the whole, last year’s bull market served investors well.

Source: JP Morgan

As you can see above, while some indices around the world dipped between October and December 2024, world stock markets performed very well over the course of 2024.

Let’s break down the events behind this mixed bag of market performance.

UK

The Autumn Budget, held on 30 October 2024, was a key contributor to the market volatility experienced in the UK throughout November and December.

As you read about in our full breakdown of the chancellor’s announcements, the rate of Capital Gains Tax (CGT) for non-property assets was raised with immediate effect, and key tax breaks in other areas were also reduced.

This said, despite some volatility after the general election and Budget, UK equities grew overall in 2024, with the FTSE All-Share posting a 9.5% return by the end of the year.

In more positive news for the UK, the Office for National Statistics (ONS) says that inflation is hovering around the Bank of England’s (BoE) target of 2%, having fallen to 2.6% as of November. In response, the BoE dropped its base interest rate – previously held at 5.25% since August 2023 – to 5% in August 2024, and again to 4.75% in November.

In addition, the ONS says that gross domestic product (GDP) growth was 0.1% in November, perhaps signifying stabler times ahead for the UK.

US

The headline event from the US in the final months of 2024 was, of course, the presidential election, which revealed that Donald Trump is set to return to the White House for a second term.

The US S&P 500 soared in response to the election result. As reported by our discretionary fund manager (DFM), Brooks MacDonald: “Historically, Trump’s policies have favoured deregulation and tax cuts, which could lead to short-term equity market gains, particularly in sectors like financials, energy, and defence.”

This said, over the medium and long terms, the Republican president’s policies could increase the country’s deficit and cause volatility.

In any case, thanks to this political shift and the continued success of the world’s biggest technology firms, US markets had a terrific year, with the S&P 500 ending 2024 on a 25% gain.

Eurozone

The final quarter of 2024 spelled trouble for eurozone markets, with fears of economic recessions in France and Germany, the ongoing conflict in Ukraine, and Trump’s promises of harsh tariffs causing investors to remain cautious.

The MSCI Europe ex-UK posted a negative return of -3.6% in Q4. This said, looking at the whole year, the index grew by 8.1%, offering hope to investors for continued gains in 2025.

Plus, the European Central Bank (ECB) cut its central interest rate twice in Q4, once in October and again in December, bringing the rate down to around 3%. This comes in response to stagnant economic growth across the region. Inflation is also estimated to stand at 2.4% as of December 2024, Eurostat reports.

Asia

After Japanese markets experienced a crash in August 2024, the Japan TOPIX has well and truly bounced back, with a 5.4% return in Q4 and a 20.5% return across the year.

Elsewhere in Asia, markets proved more unstable. With President-elect Trump vowing to impose a 60% tariff on Chinese imports, share prices took a hit in this area. South Korea, Indonesia, and the Philippines were the worst-performing regions in the MSCI Asia ex-Japan, Schroders reports, whereas Singapore and Taiwan made gains between October and December.

2024’s bull market proves that a long-term investment mindset is key

You might have read about how the Budget and US election “rocked markets” towards the end of the year. While this is true, the lucrative annual global market performance reminds investors to take a long-term approach. Focusing on growing your wealth to meet your personal goals, rather than reacting to media noise about short-term market movements, could serve you well.

Indeed, you might remember that during the initial years of the Covid-19 pandemic, the world experienced a “bear market” that saw worldwide indices report annual downturns. But after these initial downswings, markets began to recover, and investors that stayed the course have been rewarded in 2023 and 2024.

Get in touch

Here at Prosser Knowles, we work closely with our DFM to help our clients invest with confidence. We’ll speak to you about your risk tolerance, time frame, and overall goals, tailoring your portfolio to meet these ambitions as closely as possible.

Speak to one of our financial planners today to discover how building an investment portfolio could benefit you and your family.

Email enquiries@prosserknowles.co.uk or request a callback from one of our advisers.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

More stories

News

January 22nd, 2025

January MPS Update

Read more

News

January 14th, 2025

3 important factors to remember about pensions and Inheritance Tax

Read more

Contact us