Here’s a review of how some of the key events from the past twelve months have impacted markets.

1. Dec-23: Markets ended the year positively in the US, UK and Europe. Investor optimism is growing, fuelled by held interest rates and expectations of cuts in 2024. China’s economic woes continue as it yet again slipped into deflation.

2. Jan-24: Investors reassess their expectations for interest rates as central banks warn against early interest rate cuts. Bonds fell in value, while stock market returns varied led by Japanese equities delivering a return of over 8%. Economies and labour markets continue to show resiliency.

3. Feb-24: Stock markets surged on strong corporate earnings, artificial intelligence optimism and economic data. Strong job growth kept US unemployment near a 50-year low. The UK entered a recession in the final three months of 2023. Investors continue to expect interest rate cuts to begin later in 2024.

4. March-24: Global stock markets rose to record highs levels over signals from central banks suggesting future interest rate cuts. June looks well poised to potentially mark the start of a global interest rate cutting cycle.

5. Apr-24: UK stocks soar to record highs amid hopes of interest rate cuts and easing geopolitical tensions. US bonds and share prices fell as inflation rises, but the economy and job market remain strong. Inflation in the Eurozone continues to fall, leading investors to expect interest rate cuts soon.

6. May-24: UK stocks hit record highs as the economy exits recession with 0.6% Q1 2024 growth. US inflation cooled, but job growth slowed, and unemployment rose. European stocks surged as the euro area exited recession with 0.3% GDP growth.

7. Jun-24: The US economy continued to expand but areas of weakness within the labour market and consumer spending started to show. The UK and US held interest rates steady whilst the EU mad their first cut.

8. Jul-24: Signs of stress began to emerge in the US economy as and the unemployment rate increased, and consumer spending slowed. Elsewhere, The European Central Bank reduced rates for the first time in 5 years.

9. Aug-24: Stock markets endured a significant bout of volatility in August amid worries about a US recession and the implications of a sharply strengthening Japanese yen. As the month progressed fears subsided, with some more supportive data and some soothing words from central banks.

10. Sep-24: Global stock markets rallied to new record highs after the US Federal Reserve (Fed) cut interest rates for the first time since 2020 by half a percentage point. Chinese stocks soared after Beijing rolled out further stimulus measures to arrest a slowdown in the economy.

11. Oct-24: Markets were dominated by the UK budget reaction and upcoming US election in October. The budget was turned unexpectedly more material for markets after the Chancellor announced a £40bn tax increase. Bond prices fell as a result of the announcement.

12. Nov-24: Share prices rose after Republican Donald Trump was elected US President for the second time, fuelling expectations of higher domestic growth. Chinese markets fell after a stimulus programme worth $1.4 trillion to help local governments deal with debt underwhelmed investors.

 

If you are invested in a range of funds within your portfolio these are likely to be spread across different regions of the world and, depending on your attitude to risk, a range of different assets. This diversification reduces the impact on performance of any individual event like the coronavirus crisis. We take a long-term approach to investing, and we do not let short-term events force us into making decisions about how we manage your portfolio.