Overall Market Summary
November 2024 saw mixed performance across global markets as economic data and geopolitical events shaped investor sentiment. Central bank policy decisions, inflation data, and corporate earnings drove market movements, with a notable divergence between developed and emerging markets. Global equities were largely resilient despite rising bond yields, while commodity prices experienced mild corrections. Currency markets were volatile as the U.S. dollar strengthened against most major currencies, reflecting its safe-haven appeal amid global uncertainties.
United States
U.S. equity markets ended November on a positive note, with the S&P 500 gaining 1.8% and the NASDAQ rising 2.4%, driven by robust earnings in the technology and consumer discretionary sectors. The Federal Reserve maintained its hawkish stance, keeping interest rates unchanged but signaling vigilance against inflationary pressures. Economic data painted a mixed picture, with cooling inflation (CPI at 3.4% YoY) and strong employment numbers offset by weaker consumer spending. Treasury yields climbed, with the 10-year yield reaching 4.7%, as bond markets adjusted to expectations of prolonged higher rates.
Europe
European markets underperformed their U.S. counterparts, with the STOXX Europe 600 declining 0.6% over the month. Concerns over slowing growth, particularly in Germany, weighed on sentiment, exacerbated by weaker-than-expected manufacturing and services PMI data. The European Central Bank (ECB) held rates steady, emphasizing a data-driven approach amid persistent inflationary pressures. Energy stocks were among the few bright spots, buoyed by a slight uptick in natural gas prices. The euro weakened against the dollar, closing the month at $1.05, reflecting softer economic momentum in the region.
United Kingdom
UK equities experienced a modest decline, with the FTSE 100 down 0.9%, as concerns over sluggish economic growth persisted. The Bank of England kept interest rates unchanged but maintained a cautious tone due to inflation remaining above the 4% mark. Retail sales disappointed, reflecting ongoing pressure on household budgets amid higher borrowing costs. The pound sterling depreciated against the dollar, ending November at $1.21, as investor confidence in the UK economy waned.
Japan
Japanese equities posted solid gains, with the Nikkei 225 advancing 2.1% in November, supported by a weaker yen and strong corporate earnings in the export-oriented sectors. The Bank of Japan maintained its ultra-loose monetary policy, despite rising inflation, as it prioritized economic recovery. The yen fell to 153.5 against the dollar, its lowest level in decades, further boosting Japan's export competitiveness but raising concerns over the cost of imported goods.
Asia (excluding Japan)
Asian markets outside Japan had a mixed month, with Chinese equities underperforming due to weak economic data and concerns over slowing growth. The Shanghai Composite declined 1.3%, while Hong Kong's Hang Seng fell 2.4%, reflecting continued investor skepticism about China's recovery trajectory. Conversely, Indian markets remained resilient, with the Nifty 50 gaining 1.6% on strong corporate earnings and robust foreign inflows. Southeast Asian markets, particularly Indonesia and Malaysia, saw modest gains, buoyed by steady commodity prices and improving domestic demand.
Emerging Markets
Emerging markets faced headwinds from a stronger dollar and higher global bond yields, leading to capital outflows and weaker equity performance. The MSCI Emerging Markets Index fell 0.8% in November, with Latin American markets faring better than their Asian counterparts due to relatively stable commodity prices. Brazil's Bovespa gained 0.7%, supported by strong agricultural exports, while South Africa's JSE fell 1.1%, dragged down by a weaker rand and power supply issues.
Global Bonds
Global bond markets were under pressure in November as yields rose across the board. The Bloomberg Global Aggregate Bond Index declined 1.2%, reflecting tightening financial conditions. U.S. Treasuries led the selloff, with the 10-year yield up 18 basis points to 4.7%. European bonds mirrored this trend, with German bund yields rising to 2.7%. Emerging market bonds struggled, as higher U.S. yields and a stronger dollar deterred risk appetite. Investment-grade corporate bonds outperformed high-yield debt, reflecting concerns over default risks in a high-rate environment.
In summary, despite a challenging macroeconomic backdrop, November highlighted the resilience of certain market segments, underscoring the importance of active portfolio diversification.