The Roundup
Quarter in Review – Q4 2024
As we reflect on 2024, several major themes have shaped the investment landscape. The year was marked by a buoyant mood in global markets, and particularly in the U.S., driven by strong corporate earnings and resilient consumer spending. The S&P 500 Index achieved a 23.3% increase in price terms, marking its second consecutive year of returns exceeding 20%. Central banks maintained a cautious approach throughout the first part of the year, before the Bank of Canada (BoC) broke the ice and became the first G7 central bank to cut interest rates. The second half of the year was characterized by the start of a race to neutral, with both the Federal Reserve and BoC cutting rates – balancing the need to support growth while managing inflationary pressures.
Geopolitical tensions have once again been a hallmark of the year with the Middle East flaring up, but markets have surprisingly taken the turmoil in stride. Globally, developed market equities delivered total returns of 19.2%, supported by continued U.S. strength. Emerging market equities returned 8.1%, bolstered by a late rally in Chinese equities and strong performances from India and Taiwan.Looking ahead to 2025, many of these key themes are expected to carry over. Just as the fight against inflation appeared to have ended with a resounding victory for central banks, trade tensions will likely bring price pressures back into the fold following a Republican landslide victory on November 5. Meanwhile, the global economy continues to navigate the complexities of the post-pandemic recovery, with supply chain disruptions and labour market adjustments still in focus.
