Monthly Market News November 2024 – Market Trends

Alexandre Gauthy - Economist

The victory of Donald Trump in the U.S. presidential election drove a significant rally in U.S. equities, while the dollar appreciated against most major currencies throughout November. Our expert, Alexandre Gauthy, provides an analysis of November 2024’s market developments.

Equity markets: election results favor U.S. equities

Globally, equities advanced 6.5% in November (in euro terms). Behind this performance are large differences between different regions. At the top of the rankings are U.S. stocks that posted a 9% performance during the month. And smallcaps that did even better with a 14% rise. Trump's promise to pass lower corporate taxes in addition to deregulating the financial and oil sectors gave U.S. stocks a big boost. The performance of emerging and European equities, which was only around 0%, was a stark contrast. The clear underperformance of these regions can be attributed to fears of the possible import tariffs that Trump 2.0 might impose.

Bond markets: volatile U.S. bond yields

In the aftermath of the US election results, long-term US government bond yields rose from 4.25% to 4.50%. This initially higher interest rate can be explained by 3 factors: the potential impact of some of Trump's proposed policies on inflation, higher economic growth expectations and the high fiscal cost of his program. In the second half of the month, bond yields began to fall again, reaching 4.2% by the end of the month.

Central banks: Fed cuts key interest rate by 0.25 bps

In mid-September, the Fed had started its rate cut cycle with a 50 basis point (bps) cut. Due to a series of better-than-expected economic and inflation data, the Fed chose to make a more modest cut at the end of its meeting.

Currencies: rise of the dollar

The dollar continued to rise against the euro following the results of the US elections. Trump's proposed policies are partly inflationary (tariffs and deportation of migrants) but also include measures favorable to business (deregulation and tax cuts).