LIVE MARKETS-Elections, rate cuts and economic divergence: a look back at 2024
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ELECTIONS, RATE CUTS AND ECONOMIC DIVERGENCE: A LOOK BACK AT 2024
As one year comes to a close and a fresh one beckons, it's natural to look back and reflect. During the festive lull before New Year, some market players are doing just that.
Kevin Thozet, a member of the investment committee at Carmignac has shared his year in review, focusing on ten facts that dominated the market narrative in 2024.
The first is the tidbit that 40% of the world's population - representing 60% of global GDP - voted in an election, with the results overwhelmingly in favour of populist candidates.
A "divergence and convergence" narrative is next.
"We saw both divergence in economic cycles across the world (the US economy barely slowed, the European economy faltered and China recorded significant trade surpluses) and convergence in deficit persistence (for the US, France, Brazil, and the UK)", Thozet says.
Other facts include the start of long-awaited interest rate cuts, steepening of yield curves, and European and emerging markets equities struggling.
The U.S. equity market, meanwhile, had a "record year of two halves," Thozet says.
"Nvidia returned 150% over the first semester but less than 10% over the second half, in contrast, United Airlines, returned less than 10% in H1 and was up 100% in H2."
Elsewhere, risk appetite has been climbing, valuations are up across the board and commodities markets have been "well-behaved", says Thozet.
Lastly, alternative portfolio diversifiers have proven popular.
"In a year where the correlation between equity and bond prices remained largely positive, portfolio diversifiers such as precious metals, bitcoin, and the Swiss franc were sought after. All are trading at, or close, to all-time highs," he concludes.
(Lucy Raitano)
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