Posts Tagged stock market

A Rollercoaster Start to the Year -
2025 has begun with the market’s focus flipping between different topics at a lightning pace. Firstly, government bond yields spiked higher and created alarm about budget deficits. However, lower inflation data made those fears subside and led to a strong rally...

We are at a point in time where US stocks are dominating all others, in terms of both their outright size and the strength of their returns. In 2024, the MSCI USA index gained 24.6%, almost double the 12.4% return achieved by the rest of the world (MSCI World ex-USA). However, 2025 does bring a mixed outlook for unemployment and inflation, in the US and elsewhere, therefore it will be interesting to see if investment returns can remain so strong in the coming year.

Recent data has hinted at a divergence between the US and UK/EU economies, with signs of an economic slowdown in the States coinciding with Britain and Europe rebounding from a period of stagnant GDP growth. Having been neglected for several years post-Brexit, there is hope that UK stocks may finally prosper given a more favourable macroeconomic environment.

STOCKS BEGIN TO MOTOR -
In June 2023 we asked whether a new bull market had begun. Nine months later, we have our answer. The MSCI World index moved to new all-time highs in February. The US and Japanese stock markets have led the way, while others are yet to catch up - including the UK’s.

October was another difficult month for investors - the culmination of three consecutive months where stocks and bonds have declined together. However, the US and UK central banks provided “dovish” statements on November 1st and 2nd, stating policy is adequately restrictive in light of slowing inflation. Markets are now forecasting that further interest rate hikes are highly unlikely and have entered the new month on a positive note.