How have markets performed so far this year?

Category: Investment

We are now over halfway through 2024, so it’s a good time to look back at what’s been happening in the market over the past six months.

Many concerns that worried investors at the start of the year, like inflation, interest rates, and the outcomes of key elections, are still not settled. There’s also ongoing uncertainty due to unexpected elections in the UK and France, as well as geopolitical tensions in Ukraine and the Middle East. Despite these challenges, investors have done well. Stock markets have continued to recover since late 2023, seeing significant gains, especially in technology stocks. Bonds have stabilized too, finding a new balance, although they haven’t been outstanding performers.

Inflation and Interest Rates

Many thought central banks would start lowering interest rates at the beginning of the year due to lower inflation. However, the US Federal Reserve and the Bank of England have not made any cuts yet. The European Central Bank and the Swiss National Bank made small reductions, but inflation hasn’t decreased as quickly as expected. This slow drop shows that the economy is strong, there is a tight job market, and supply chain issues persist.

We still think inflation will continue to go down, but not as low as it was before the pandemic. Factors such as global trade tensions, climate change, and increased defence spending indicate that inflation will be an ongoing worry. Central banks are aware of this and are being careful.

Future Interest Rate Cuts

Markets think interest rates will be cut in the future. If rates stay high because the economy is growing strongly but there isn’t much inflation, this could help riskier investments like stocks. But if high rates cause stagnation, or “stagflation,” the outlook wouldn’t be as good. Investors should be careful what they wish for when it comes to lower rates because cutting rates during a recession wouldn’t be as good for stocks and corporate bonds.

Political Developments

The political situation is uncertain in the UK and France due to the upcoming elections. The UK election is not expected to affect the markets, as the strong performance of the pound indicates. In France, there is a risk of a hung parliament, which could limit the ability of any party to implement their policies. The US election also adds uncertainty due to high political polarization and fiscal spending habits of both parties. It raises questions about future economic policies. The best-case scenario would be a surge in productivity from advancements in AI, helping the economy outgrow its debts.

Market Performance Highlights


US stocks reached new records, with the S&P 500 gaining about 15%. This growth was powered by company profits, especially from tech firms working with AI. While there are worries about most of the gains being concentrated in a few very large tech stocks, many believe these companies’ strong financial basics and balance sheets give a firm base.


The FTSE 100 went up by almost 8%, mainly because of dividends and strong performances from a few key companies like AstraZeneca and Shell. Smaller companies are also doing well, especially because there is more activity in mergers and acquisitions.


European markets have had different results. Local currency gains have been good, but political uncertainties and stalled interest rate cut expectations have slowed progress. President Macron’s unexpected snap election in France has added to the region’s volatility.


Japanese stocks have been doing well, but the weakening yen has affected returns. Despite inflation, the Bank of Japan has been hesitant to raise rates, which has kept investors interested in Japanese shares.

Emerging Markets

The recent elections in India, Mexico, and South Africa initially caused some instability in the markets. However, the markets have since stabilized. Following the Indian elections, Indian shares reached new highs, and South African stocks also performed well despite currency weakness. Nevertheless, China’s ongoing economic challenges and geopolitical tensions continue to cast a shadow over emerging markets.


Gold has risen by about 13% this year, driven by central banks diversifying away from dollar-based assets. This trend is likely to continue, providing a strong demand for gold.

Fixed Income

Government bonds are currently offering a decent return for those looking for economic security. The Bloomberg Global Aggregate Index, which tracks investment-grade bonds, has seen a small decrease so far this year due to market uncertainty.

Conclusion and Outlook

As we moved into 2024, many had hoped that inflation would decrease, and interest rates would start to go down. While these things haven’t happened yet, we are seeing strong growth and good performance from equities. Even though there is still uncertainty, there is confidence companies around the world will continue to make profits over the long term.

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