Theranautilus Secures $1.2 Mn in Seed...
19 Nov 2024
The first half of 2024 has been a whirlwind for global markets, characterized by the unstoppable rise of mega-cap stocks, slow central bank pivots, political upheavals, and a resurgence in M&A activity.
Despite predictions, a global wave of interest-rate cuts did not materialize. However, Nvidia and the rest of the "Magnificent 7" saw a remarkable $3.6 trillion increase in market value.
MSCI's world stocks index for 47 countries gained a solid 11% since January. However, tech stocks surged by 30%, and Nvidia alone saw a staggering 150% gain.
Chris Metcalfe, chief investment officer at IBOSS Asset Management, noted that Nvidia contributed 30% to the S&P's returns this year, making it the most expensive stock in the world's priciest market.
Milestones were also set in currency and commodity markets. The Japanese yen hit a 38-year low against the dollar, cocoa had one of its best-ever performances, and French bond risk soared to its highest since the euro crisis, following President Emmanuel Macron's recent political challenges.
Government bonds faced difficulties, with losses around 1.5% for those holding a basket of benchmark bonds. Predictions for U.S. rate cuts dwindled from seven to just one or two, significantly affecting performance, as noted by Nadege Dufosse, head of multi-asset at Candriam.
Political events have added to market uncertainty. A lackluster performance by U.S. President Joe Biden in a debate against Donald Trump increased election anxiety, and the UK's upcoming general election, likely to result in the first government change in 14 years, is not expected to cause significant market disruption due to the centrist nature of the main candidates.
In commodities, cocoa prices skyrocketed by almost 85% due to shortages, gold hit a near-record high of $2,450 an ounce, oil rose by 12%, and bitcoin surged past $70,000 following approval of bitcoin ETFs by U.S. regulators.
Global M&A activity rose by 5%, driven by major deals like Capital One's $35-billion takeover of Discover Financial and Synopsys' acquisition of Ansys. However, BHP's $49-billion bid for Anglo American did not succeed.
Emerging markets saw mixed fortunes. Ecuador's bonds surged by 46% despite debt concerns, and Argentina's bonds jumped by 32% following the election of President Javier Milei. Bonds in distressed countries like Zambia, Ghana, and Sri Lanka rallied between 16%-23% as they approached the end of debt restructurings, according to Kevin Daly of Aberdeen.
Conversely, Chinese property stocks fell for the ninth consecutive quarter, and significant devaluations hit currencies in Nigeria and Egypt, down 42% and 36% respectively. Mexico's peso dropped nearly 8% this month due to concerns following a decisive presidential election result.
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