September/Q3 2024 Market Update

Overview

The third quarter saw positive returns across major asset classes although UK investors saw only a 0.1% gain in September and appeared to lose 0.7% over the full third quarter, due to a resurgent Pound Sterling which rallied 5.8% over the period and held back returns in global assets.

A rapid rally in Chinese stocks - with key benchmarks up over 30% since mid-September - allowed emerging markets to lead the way, rising 6.4% in September and 7.8% over the quarter, after the Chinese government announced a range of stimulus measures and cut key interest rates to bolster consumer spending and the challenged property sector.

Several major central banks initiated interest rate cuts for the first time in several years during the quarter, boosting confidence that the slowing global economy could see a soft landing. The Federal Reserve cut by 0.5% and spurred US stocks to close the period at a record high, rising 2% over the month and 5.5% over the quarter.

UK and Japanese stocks were the laggards, with Japanese stocks down 5.8% and UK stocks up only 1.3% over the quarter. However both of these countries have been affected by rallying currencies which held back corporate profits and stock market performance. Sterling hit the highest in over two years with the Bank of England set to cut interest rates slower than most global peers, while the Japanese Yen rallied nearly 12% over the quarter after ending a long period of easy money with interest rate hikes and a new, more hawkish, Prime Minister.

European equities posted a 1.7% gain over the quarter, reflecting the ongoing challenges in the eurozone’s economic recovery. Economic indicators highlighted the slow pace of growth, particularly in Germany, where the country’s heavy dependence on manufacturing has become a hindrance.

Elsewhere, gold continued its rally to new all-time highs, up 13.3% over the quarter, while oil prices fell 15.3% over the period despite the ongoing tension in the Middle East, with demand appearing to struggle while supply continues to expand.

Full update below…