What caught our eye in 2024

It’s been another year packed with talking points and noteworthy market moves, as politics and interest rates were among the issues that jostled for the attention of headline writers in 2024. In this retrospective, we focus in on a few of the major issues that have stood out to us. 

Poll position 

Botswana, South Africa, Ireland, Mexico and Iceland were among the 72 countries that were scheduled to go to the polls in 2024, according to the United Nations Development Programme¹. Even before unplanned snap elections are taken into consideration in France and the UK, for example, over 3.7 billion voters were expected to head to the polls, making 2024 the biggest election year in history.  

Undoubtedly for global markets, the US presidential election in November was expected to be the major one to watch, as the US – which constitutes over 60% of several global indices – is the largest equity market in the world. When Donald Trump emerged as the winner of the race to the White House, the US market stepped higher in the immediate aftermath.

Polling data in the UK helped to flag the likely outcome of the snap general election in July, and it did not have a large impact on equities. In India, Narendra Modi failed to win a majority but remains in power.  

Market moves 

Equity markets stepped higher over the first 11 months of the year, with the FTSE All-World Index – a commonly used measure of global equities – rising 20%. It was a year of markets hitting record highs in many countries, helped by a broad mix of drivers. Elections, expected changes to interest rate policy and economic updates were among the influences on share prices. US stock markets gained strongly as interest rate cuts were anticipated.

Additionally, hopes for ongoing growth in artificial intelligence helped many US technology stocks. In the UK, the FTSE hit a new high in May helped by economic optimism but has since lost momentum. Despite volatility in August in the wake of Japan’s second interest rate hike, Japan also reached new heights during the year, while some emerging markets, such as India, Taiwan and South Africa, performed well. China, which has generally trailed other major global markets since 2021, struggled on negative sentiment surrounding its property market.

In the autumn, authorities announced supportive measures which helped its equity markets regain some lost ground. 

International relations 

Geopolitical tensions remained high as a result of the war between Russia and Ukraine as well as ongoing conflict in the Middle East. These troubles have impacted markets at various points during the year, not least when the strife in the Gaza Strip widened out to involve Iran and Lebanon. However, despite these conflicts, since the end of 2024’s first quarter, oil futures prices generally moved lower through to November. Not least because markets have seen solid supply, helped by production increases from some major oil producing countries.  

A smaller price to pay? 

Since reaching peaks in late 2022 and early 2023, inflation proved stubborn in coming down, despite the introduction of higher rates in, for example, the US, Eurozone and the UK. This stickiness was as a result of issues such as strong labour markets and wage rises. During 2024, inflation came within striking distance of the 2% target of the US Fed, the Bank of England and the European Central Bank giving them room to reduce rates as the year progressed. Despite these moves, rates are broadly still at elevated levels.

How much they reduce from here will depend on the central banks’ analysis of economic data points such as gross domestic product growth, unemployment and inflation.  

What’s next? 

We will be publishing our next outlook in January, so please look out for our thoughts on some of the issues above and more. 

*Unless otherwise mentioned, all index data are shown in sterling total return terms. 
Source: FE Analytics 

References

United Nations Development Programme, a ‘super year’ for elections, accessed 22 November 2024 https://www.undp.org/super-year-elections