The year 2024 demonstrated a remarkable resurgence in global financial markets, characterised by the resilience and
renewed optimism following the challenges of previous years. Equity markets outperformed across the board, buoyed by
strong economic fundamentals, technological advancements, and region-specific policy measures.
Developed market equities led the charge, with the MSCI All Country World Index delivering an impressive total return of
19.2% (USD), driven primarily by the robust performance of the United States and the meteoric rise of mega-cap
technology stocks centered around artificial intelligence (AI). While underperforming developed peers, emerging markets
still delivered a commendable 8.1% (USD), supported by a late-year rally in Chinese equities and strong gains in
economies such as India and Taiwan.
Commodities posted more subdued returns at 5.4% (USD), as weak demand from China weighed on prices. However,
gold shone brightly with a stellar 27.1% (USD) gain, reflecting heightened concerns over U.S. fiscal policy and persistent
geopolitical uncertainties. In contrast, fixed-income markets struggled, with global investment-grade bonds returning -1.7%
(USD) amid rising yields and a stronger U.S. dollar. Central banks worldwide grappled with monetary policy normalisation,
leading to divergent regional economic trajectories.
UNITED STATES
The U.S. economy reaffirmed its position as a global growth
engine, posting robust real GDP growth of 2.6% quarter-onquarter
annualised. This resilience was fueled by strong
consumer spending, a healthy labour market, and resilient
corporate earnings. U.S. equities outperformed globally, with the
S&P 500 Index achieving a total return of 25% (USD), while the
Nasdaq Composite soared 29.6% (USD).
A key driver of this performance was the “Magnificent Seven”
mega-cap technology firms, which collectively gained 67.3% in
2024 and now account for 34.6% of the S&P 500’s market
capitalisation, or $16 trillion of its $46 trillion total. This
dominance highlights the transformative impact of AI
technologies, which continue to reshape industries.
Beyond technology, financial stocks contributed significantly,
supported by optimism over potential deregulation following
the U.S. elections. Notable sector performance included
Communication Services (+40.2%), Technology (+36.6%), and
Financials (+30.5%), while Materials (-0.04%) and Healthcare
(+2.6%) lagged.
The Federal Reserve’s measured approach to policy
normalisation, focusing on a balanced calibration of interest
rates, further bolstered market sentiment and ensured broader
economic stability.
ASIA
Asia offered a mixed but notable performance, with Japan
emerging as a standout performer. Japanese equities returned
20.5% (JPY), bolstered by corporate governance reforms, rising
real wages, and a weaker yen that enhanced export
competitiveness.
China saw a late-year rally in equities (+19.8% USD), driven by
stimulus measures and signs of recovery. Nonetheless, ongoing
concerns about the property market and weak consumer
sentiment tempered optimism. South Korea and Taiwan also
delivered strong returns, leveraging their strategic positions in
the global semiconductor supply chain.
EMERGING MARKETS
Emerging markets achieved an 8.1% return (USD), bolstered by
strong performances across Asia. Chinese equities staged a
notable late-year rally, climbing 19.8% (USD) on the back of
cohesive policy measures designed to stimulate economic
growth. Key initiatives included fiscal stimulus, real estate sector
support, and efforts to enhance consumer confidence.
However, lingering challenges such as subdued consumer
sentiment and instability in the property market tempered
overall optimism. India and Taiwan also delivered standout
results, propelled by structural reforms, robust domestic
consumption, and sustained global demand for technology
exports.
SOUTH AFRICA
South African markets delivered a mixed performance.
Domestically focused equities within the FTSE/JSE Capped
SWIX Index rose 21%, reflecting improving economic sentiment.
In contrast, resource stocks, particularly platinum miners,
struggled with a 26% decline (ZAR) due to weaker commodity
prices. The bond market excelled, with the JSE All Bond Index
posting a robust 17% return (ZAR) amid declining domestic
borrowing costs, even as global interest rates rose. The rand
showed resilience, ranking as the fourth best-performing
currency against the U.S. dollar in 2024.
The U.S. is expected to sustain healthy growth in 2025, with real GDP forecasted at 2.5%. Inflationary pressures are easing, and the labour market remains stable. Analysts anticipate continued stock market gains, with projections for the S&P 500 ranging from 10% to a bullish 25% increase.
Artificial intelligence will remain a defining theme, transitioning from an initial surge to a foundational technology. Broader market participation across sectors is expected, potentially creating a healthier investment landscape.
Globally, 2025 is likely to bring diverse opportunities and challenges. A key theme will be greater variability across regions, sectors, and investment styles, fostering a more dynamic and diversified market environment.
As we step into 2025, we remain fully committed to keeping a close eye on global economic trends and market shifts to ensure our clients are well-positioned to seize opportunities while managing risks effectively. While maintaining a strategic focus on the “Magnificent Seven” tech giants, we are also expanding our portfolio with investments in mid-cap companies and sectors set to benefit from exciting trends, such as advancements in AI, a strong global economy, and potential changes in interest rates. Looking ahead, our priority is to maintain a balanced and adaptable investment approach, working closely with our clients to navigate the opportunities and challenges that lie ahead in 2025.