Summer Investor Market Update 2024

By Michael Zacharia, Investment Analyst

We have reached the halfway point for the year.  To date, global equity markets have continued to trend higher against a backdrop of healthy corporate profit growth and a global economy that looks to be in better shape. 

Global bond markets though have disappointed over inflation concerns and that interest rate cuts would not be as swift as had been hoped. 

Election concerns have also impacted sentiment.  In the UK, Prime Minister Rishi Sunak called a general election for 4th July (and where Sir Keir Starmer’s Labour party swept to power), President Macron also called a snap election which has left France in political turmoil. Whilst in the US, the November election could be a defining moment and one that has the ability to jolt the positive equity market returns. 

What is the rest of 2024 outlook for investors?

We remain both vigilant and optimistic.  Vigilant that global growth may not be growing as had hoped and inflation which is proving a little stubborn and curtailing the markets desire for cutting interest rates.

The medium to longer term picture does appear to be healthier.  We expect lower inflation, moderate global growth and interest rate cuts.  This should prove beneficial for both equity and bond prices, but there is, and will remain, divergence across the geographies and asset classes. 

With this in mind, it remains extremely important to continue to manage well diversified portfolios.

A quick and final word on the Labour government’s return to power.  The unanimous victory will long remain in the mind but the result was expected.  Market participants view this expected outcome and the prospective political stability as positive for the UK as political stability should extend to financial stability.

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