In our latest market commentary, our adviser Eamonn Lynch looks back on the key trends from the first quarter of 2024. The start of the year has seen significant fluctuations in the stock markets and an evolving economic landscape, influenced by a myriad of factors ranging from geopolitical tensions to technological advancements.

Global Markets

Global stock markets witnessed a mix of highs and lows during the first quarter of 2024. Despite lingering concerns over inflation and supply chain disruptions, major indices such as the S&P 500 and FTSE 100 showed resilience, buoyed by robust corporate earnings. However, volatility remained with issues in Eastern Europe and the Middle East, contributing to market fluctuations.

Inflation

Inflation remained a focal point for investors and policymakers alike. The spectre of rising prices, fuelled by supply chain disruptions and increased consumer demand, loomed large. Central banks adopted a cautious approach and have held interest rates steady except for Japan, who have increased their interest rate for the first time since 2007, turning positive for the first time in 8 years!

Geopolitics

Geopolitical developments injected a degree of uncertainty into financial markets. Tensions between major powers, trade disputes, and regional conflicts contributed to investor unease. Plus, upcoming elections provide more uncertainty, not least in the USA and the trade sanction threats with China.

Technological Disruption

The Magnificent 7 of 2023 has now become a bit of a mixed bag and evolving in to the “Fab Four” as some of them encounter issues and lose ground, Tesla, for example, with production issues at their Berlin Factory following an arson attack. But the technology sector continued to thrive, driven by innovations in artificial intelligence, cloud computing, and digitalization.

Outlook

The first quarter of 2024 could be characterized by resilience, volatility, and ongoing transformation. While geopolitical uncertainties and inflationary pressures posed challenges, opportunities for growth and innovation persisted.

Interest rate cuts are still on the horizon, but probably fewer of them and not as soon as markets were expecting.

As investors navigate this complex landscape, informed decision-making, diversification, and a long-term perspective remain paramount. Adaptability and strategic foresight will be essential for navigating the evolving economic landscape.