Market Overview : December

Red Wave, Green Lights · 11 December 2024

The month of November was dominated by the American elections. Former President Donald Trump will return to the White House for the next four years, with the Republican Party in the majority in the Senate and the House of Representatives. Financial markets reacted to this result by stepping up their bets on assets that could benefit. The “Trump trades” thus pushed up bond yields, the dollar and, more generally, the American stock market. Despite conflicting winds ahead and daily speculation about appointments within the new administration, US stocks showed remarkable form, generating the best monthly performance of the year. They benefited from the euphoria generated by the red wave in Washington, a reduction in interest rates by the Federal Reserve and consumption which remains solid. Conversely, emerging and Asian markets suffered again, ending the month in negative territory, penalized by a still delicate Chinese economy and stimulus measures deemed insufficient to stimulate internal demand. Finally, Europe continues to show tangible signs of weakness, both politically and economically. One of the few positive points for European equity markets remains the likely significant rate cut which should be announced in December by its central bank.

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Market Overview - December 2024