Market Pulse - November 2024
- Monthly Market Pulse
- 09.12.24
Key themes
- The main event in November was the US election, which resulted in Donald Trump being re-elected and the Republicans winning a ‘clean sweep’. Global stock markets moved higher, driven by US indices rallying to new all-time highs amid expectations that positives from tax cuts and deregulation would more than offset any drags on US growth from tariff policies.
- Bond yields fell, particularly in the Eurozone, as proposed US tariffs were expected to hamper European growth and, when combined with low inflation, would allow the European Central Bank (ECB) to cut rates more aggressively.
- US economic data showed strength while there were signs of softer activity in the Eurozone.
Markets snapshot
- The MSCI All Country World index rose by 4.1% (6.7% in euros) over November, largely driven by US indices rallying to new all-time highs.
- The MSCI USA rose by 6.3% (9.2% in euros).
- Emerging markets (EM) stocks were hampered by the potential for US tariffs to weigh on growth. The MSCI EM index fell by 2.7% (-0.9% in euros).
- Eurozone government bond returns were positive as a result of a sharp fall in yields. The 10-year German bund yield was down by 31bps over the month to 2.11% as a lacklustre growth backdrop and headwinds from potential US policies were set to support the case for more aggressive easing from the ECB. The ICE BofA 5+ Year Euro Government bond index returned 3.2% in November.
- Corporate bond returns were supported by falling yields. European investment grade corporate bonds returned 1.7% as yields declined by 30bps to 3.13%. Global high yield bonds returned 0.9% as yields declined by 9bps to 6.39%.