November 2024 Global Markets Recap
Highlights
- Mortgage Rates Remain Stubbornly High
- Bitcoin Nears $100,000 Milestone
‍
US Markets
The U.S. election results were a key driver of market performance in November. Donald Trump’s presidential victory, along with the Republican party securing control of both chambers of Congress, fueled optimism about pro-growth policies that could strengthen the U.S. economy and markets. Expectations for tax cuts, expansionary fiscal policies, and a more protectionist trade stance contributed to a rally in U.S. equities, with domestically focused small-cap stocks leading the way, gaining 10.29% during the month. Sectors anticipated to benefit from deregulation, such as financials and energy, saw strong gains. As of now, 95% of the companies in the S&P 500 have reported their Q3 2024 earnings. The earnings growth rate for the quarter stands at 5.8%. If this growth rate holds, it will represent the fifth consecutive quarter of year-over-year earnings growth for the index.
‍
US Economy
Consumption spending has been the primary driver of growth, rising 3.7% in Q3—the fastest pace since Q1 2023—and contributing approximately 2.5 percentage points to overall GDP growth1. This resilience has persisted despite ongoing challenges, including elevated inflation and higher interest rates.
On November 7, the Federal Reserve lowered the federal funds rate by 0.25%, setting the target range at 4.5% to 4.75%. This move was widely anticipated by market participants. Historical trends suggest that following similar rate cuts, mortgage rates often increase slightly in the weeks that follow, with an average uptick of 0.1 percentage points six weeks after the initial cut. This is because mortgage rates are tied to long-term interest rates, which typically incorporate expectations of Fed actions ahead of time. Looking ahead to the December 18 meeting, current market projections indicate a 72.9% likelihood of another 25-basis-point rate reduction.
‍
Global Markets
International equities have delivered a strong return year-to-date in 2024, but the performance gap with U.S. equities remains substantial. The next administration's pro-U.S. policies, including those favoring a stronger dollar through higher interest rate differentials and tariff-related uncertainties, have introduced new headwinds for international markets.Â
In China, a 30% tactical rebound in equities during Q3 followed coordinated stimulus efforts. However, the country remains in the throes of a cyclical slowdown. Policymakers are likely to maintain accommodative measures to stabilize economic momentum, though they appear reluctant to pursue aggressive growth policies. Should tariff measures from the U.S. be fully implemented, Chinese policymakers may respond with stronger economic interventions, but the scale and timing of such measures remain uncertain. After the recent rally, concerns about growth sustainability could deter investors from assigning higher valuations to Chinese equities.
In Europe, economic challenges persist. A recovery in European equities will likely depend on improvements in Chinese demand, a manufacturing rebound, or stronger consumer spending—all of which face significant hurdles heading into 2025. While additional monetary easing by the European Central Bank (ECB) may support credit-dependent sectors, slow progress in consumer confidence and spending dampens the outlook. The potential imposition of tariffs could add further strain on the eurozone, which has struggled to coordinate a unified policy response.
‍
Fixed Income Markets
Since September, the Federal Open Market Committee (FOMC) has reduced rates by 75 basis points, yet financial conditions have tightened slightly, with real yields climbing and the 10-year Treasury yield rising by 80 basis points. While conditions remain relatively accommodative, they are not as loose as one might typically expect following such significant rate cuts.
Central banks, including the Fed, tend to be price-insensitive bond buyers, driven by mandates tied to monetary policies like quantitative easing or trade imbalances, such as those involving China. Unlike central banks, private foreign investors are more price-sensitive, playing a larger role in the Treasury market today. The era when buyers would purchase bonds at any price has largely passed, ushering in a more dynamic environment where market prices play a greater role in investor decisions. This shift promotes better price discovery in the bond market but also introduces the potential for increased volatility as investors become more selective. Ultimately, this evolving landscape is likely to maintain upward pressure on term premiums.
‍
Alternative Assets Markets
Bitcoin gained 38.69% in November, nearing the $100,000 milestone and achieving its strongest monthly performance since February, when it surged 45% following the launch of spot Bitcoin ETFs. Post-election, Bitcoin ETFs experienced record-breaking inflows, including the largest single-day inflow on record, providing liquidity to offset profit-taking by long-term holders as Bitcoin reached new highs. Adding to this momentum, spot cryptocurrency exchange volumes climbed to $2.9 trillion in November, the highest level since May 2021, according to data from crypto market tracker New Hedge. These developments reflect increasing investor engagement and growing liquidity in the digital asset market, signaling further maturation of the space.
‍
Sources:Â
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. Â
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors, and do not necessarily reflect the views or positions of Savvy Advisors.
November 2024 Global Markets Recap
Highlights
- Mortgage Rates Remain Stubbornly High
- Bitcoin Nears $100,000 Milestone
‍
US Markets
The U.S. election results were a key driver of market performance in November. Donald Trump’s presidential victory, along with the Republican party securing control of both chambers of Congress, fueled optimism about pro-growth policies that could strengthen the U.S. economy and markets. Expectations for tax cuts, expansionary fiscal policies, and a more protectionist trade stance contributed to a rally in U.S. equities, with domestically focused small-cap stocks leading the way, gaining 10.29% during the month. Sectors anticipated to benefit from deregulation, such as financials and energy, saw strong gains. As of now, 95% of the companies in the S&P 500 have reported their Q3 2024 earnings. The earnings growth rate for the quarter stands at 5.8%. If this growth rate holds, it will represent the fifth consecutive quarter of year-over-year earnings growth for the index.
‍
US Economy
Consumption spending has been the primary driver of growth, rising 3.7% in Q3—the fastest pace since Q1 2023—and contributing approximately 2.5 percentage points to overall GDP growth1. This resilience has persisted despite ongoing challenges, including elevated inflation and higher interest rates.
On November 7, the Federal Reserve lowered the federal funds rate by 0.25%, setting the target range at 4.5% to 4.75%. This move was widely anticipated by market participants. Historical trends suggest that following similar rate cuts, mortgage rates often increase slightly in the weeks that follow, with an average uptick of 0.1 percentage points six weeks after the initial cut. This is because mortgage rates are tied to long-term interest rates, which typically incorporate expectations of Fed actions ahead of time. Looking ahead to the December 18 meeting, current market projections indicate a 72.9% likelihood of another 25-basis-point rate reduction.
‍
Global Markets
International equities have delivered a strong return year-to-date in 2024, but the performance gap with U.S. equities remains substantial. The next administration's pro-U.S. policies, including those favoring a stronger dollar through higher interest rate differentials and tariff-related uncertainties, have introduced new headwinds for international markets.Â
In China, a 30% tactical rebound in equities during Q3 followed coordinated stimulus efforts. However, the country remains in the throes of a cyclical slowdown. Policymakers are likely to maintain accommodative measures to stabilize economic momentum, though they appear reluctant to pursue aggressive growth policies. Should tariff measures from the U.S. be fully implemented, Chinese policymakers may respond with stronger economic interventions, but the scale and timing of such measures remain uncertain. After the recent rally, concerns about growth sustainability could deter investors from assigning higher valuations to Chinese equities.
In Europe, economic challenges persist. A recovery in European equities will likely depend on improvements in Chinese demand, a manufacturing rebound, or stronger consumer spending—all of which face significant hurdles heading into 2025. While additional monetary easing by the European Central Bank (ECB) may support credit-dependent sectors, slow progress in consumer confidence and spending dampens the outlook. The potential imposition of tariffs could add further strain on the eurozone, which has struggled to coordinate a unified policy response.
‍
Fixed Income Markets
Since September, the Federal Open Market Committee (FOMC) has reduced rates by 75 basis points, yet financial conditions have tightened slightly, with real yields climbing and the 10-year Treasury yield rising by 80 basis points. While conditions remain relatively accommodative, they are not as loose as one might typically expect following such significant rate cuts.
Central banks, including the Fed, tend to be price-insensitive bond buyers, driven by mandates tied to monetary policies like quantitative easing or trade imbalances, such as those involving China. Unlike central banks, private foreign investors are more price-sensitive, playing a larger role in the Treasury market today. The era when buyers would purchase bonds at any price has largely passed, ushering in a more dynamic environment where market prices play a greater role in investor decisions. This shift promotes better price discovery in the bond market but also introduces the potential for increased volatility as investors become more selective. Ultimately, this evolving landscape is likely to maintain upward pressure on term premiums.
‍
Alternative Assets Markets
Bitcoin gained 38.69% in November, nearing the $100,000 milestone and achieving its strongest monthly performance since February, when it surged 45% following the launch of spot Bitcoin ETFs. Post-election, Bitcoin ETFs experienced record-breaking inflows, including the largest single-day inflow on record, providing liquidity to offset profit-taking by long-term holders as Bitcoin reached new highs. Adding to this momentum, spot cryptocurrency exchange volumes climbed to $2.9 trillion in November, the highest level since May 2021, according to data from crypto market tracker New Hedge. These developments reflect increasing investor engagement and growing liquidity in the digital asset market, signaling further maturation of the space.
‍
Sources:Â
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy. Â
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors, and do not necessarily reflect the views or positions of Savvy Advisors.
