Knowledge and Insight - Markets

As 2024 winds down and Wall Street is lit up like a Christmas tree, there’s still plenty to keep us on our toes. Will central banks bring glad tidings?

Although returns over the past year have been at times hard won, and often made in defiance of a doom and gloom narrative about the state of the world, most investors can look back on some reasonable gains.

The outlook for Europe looks cloudy as its two largest economies struggle. Comparatively, the UK is doing generally ok. It’s only the US that continues to power ahead.

A plan to sort out France’s unsustainable state spending is in jeopardy as another government is threatened with dissolution by the parliament. Meanwhile, chances improve for a December interest rate cut in the US.

Developed nations have agreed to a three-fold increase to clean energy and climate mitigation funding for poorer countries, but with a 10-year phase-in. Meanwhile, advanced nations are battling spiralling energy costs – some more than others.

The UK economy hit the wall last quarter, while inflation started rising again. In the US, expectations of interest rate cuts have cooled since Donald Trump was elected President.

Equity and bond investors had opposite reactions to the US election. But Trump 2.0 may have less influence than investors first hoped or feared.

Bond yields rise in the aftermath of the UK Budget and with Americans poised to go to the polls. 

Will China roar back from its slump? How can we protect your investments from rising geopolitical conflict, and will the US election make it worse? And how are UK markets reacting to big tax, spending and borrowing increases?

Labour will deliver its first Budget in almost 15 years this week. With little wiggle room and a shopping list of problems, it will be hard for the Chancellor to please anyone.

Fears may be overdone that UK bosses will move to higher-paid jobs across the Atlantic.

UK inflation is below the central bank’s 2% target for the first time in three and a half years. That should clear the way for further cuts to interest rates.