By Craig McAvinue – 3 December, 2024
“The greatest danger occurs at the moment of victory”
As we enter the last month of the year, most markets continue on an upward trajectory, with November gains wiping out October’s losses across most developed markets…
Data from Google Finance
The USD also had a strong month with the exception of falls against the Japanese Yen..
Data from Google Finance
Last month saw the S&P 500 reach another landmark when the Index rose above 6,000. Having breached the 5,000 mark only this year. The new benchmark illustrates what a strong year that particular index is having.
Post-recession recovery has been robust, with significant economic growth, particularly in the latter half of the year. This growth is reflected in corporate earnings, which have generally been strong, driving up some stock prices. Though as noted in previous market updates much of these gains have come from a relatively small number of companies, many of whom are in the AI sector with companies like Nvidia, Apple, Microsoft, and Amazon leading the charge. The expectation that AI will lead to more efficient business processes and new revenue streams has been a major driver in this growth.
Geo political situations have far less impact on stock market performance than many people believe. The growth this year whilst we are still experiencing large conflicts in Russia / Ukraine and the Middle East illustrates this.
The recent US elections however signify positivity for the markets as unlike previously the outcome was decisive. There is also confidence in business communities around the new administration’s approach to business.
However investors always need to be aware of being complacent. The 2021 results look similar to those this year, and in 2022 we experienced significant falls on the back of profit taking.
Looking to China and the situation (as always) seems somewhat opaque. The tremendous upward spike we saw in the Hang Seng in October has almost been wiped out.
Historically quarter four is the best performing and we head towards the festive season, many investors will looking for the seasonal “Santa rally”
Whatever happens in December, 2024 will surely be seen as a positive year across most markets. As always though a little more digging is needed to understand where this growth came from and it can be quite a narrow number of companies. Plenty of businesses have had their struggles also in 2024.
For the Bitcoin Brigade, it’s been a good time of late. It will be interesting to see what happens when it hits $100k and whether this is a trigger effect for a sell off. The pure market that Crypto is means I have taken a somewhat cautious approach to the sector. Though you cannot argue with the gains and having a small percentage of your overall wealth parked in this alternative sector could be a good idea.
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