Introduction

November 2024 brought a dramatic turnaround in global markets as investors welcomed a broad-based decline in inflation and a softening tone from major central banks. Equities rebounded strongly, bond yields fell sharply, and risk appetite returned across asset classes. With economic data pointing to decelerating but stable growth, market sentiment shifted back toward the prospect of a soft landing and potential rate cuts in early 2025.

United States

U.S. equity markets staged a powerful rally. The S&P 500 gained 7.4%, and the Nasdaq Composite rose 8.1%, marking their best monthly performance since July 2022. Technology, industrials, and real estate led the advance as Treasury yields dropped and earnings surprised to the upside.

The October CPI report showed headline inflation slowing to 3.2% and core inflation falling to 3.1%. The Federal Reserve held rates steady but acknowledged “notable progress” on inflation, fuelling expectations of a first rate cut by March 2025. The 10-year Treasury yield declined from 4.71% to 4.24% by month-end.

Europe

European equities followed suit. The Euro Stoxx 50 rallied 5.6%, led by gains in autos, consumer discretionary, and utilities. Eurozone inflation dropped to 2.2%, its lowest since mid-2021, reinforcing expectations for a rate cut by the European Central Bank in Q2 2025. Core inflation eased to 2.5%, and forward-looking surveys improved modestly.

The ECB maintained its deposit rate at 3.75% but softened its tone on policy duration. German and French bund yields fell alongside U.S. Treasuries. The euro appreciated slightly as political tensions eased in Southern Europe and financial conditions improved.

Asia-Pacific

Asian markets gained, though with less momentum than the U.S. and Europe. Japan's Nikkei 225 rose 2.6%, supported by corporate earnings and lower global yields. The Bank of Japan maintained its dovish stance, with policymakers signaling that monetary tightening would remain slow and data-dependent.

China's equity markets were mixed. The Hang Seng Index rose 1.8%, while the Shanghai Composite added 0.9%. Stimulus measures continued to trickle in, with particular focus on infrastructure and small business support. Economic data remained mixed, but fears of systemic contagion from the property sector faded somewhat. Australia's ASX 200 climbed 3.1% on strong financial sector performance and a rebound in commodity-linked stocks.

Emerging Markets

Emerging markets saw robust gains. The MSCI Emerging Markets Index rose 5.2% in November, benefitting from improved global liquidity, a softer U.S. dollar, and recovering capital flows. Local currency debt outperformed, and EM equities attracted renewed attention.

India's Nifty 50 rose 4.4% to a new record high, driven by upbeat earnings and pre-budget optimism. Brazil's Bovespa jumped 6.0%, with energy and materials stocks leading the way. Mexico, Indonesia, and South Africa also posted strong returns as currencies stabilised and risk sentiment improved.

Commodities

Oil prices retreated. Brent crude fell to USD 81/barrel by month-end, down from USD 94 at the start of November, as supply concerns eased and demand forecasts were revised lower. The decline helped improve inflation sentiment across import-reliant economies.

Gold rallied to USD 2,462/oz, supported by falling real yields, a weaker dollar, and geopolitical hedging. Copper gained 3.7% on tighter global inventories and signs of improved Chinese factory output.

Fixed Income & Currencies

Bonds rallied across the board. The U.S. 10-year Treasury yield fell by nearly 50 basis points, and the yield curve began to re-steepen slightly. Credit spreads narrowed, particularly in high yield and emerging market debt, reflecting the return of risk appetite.

The U.S. dollar weakened against most major currencies. The euro and yen recovered slightly, while emerging market currencies strengthened across the board. The Singapore dollar appreciated modestly as MAS reiterated its policy stance and inflation continued to trend downward.

Outlook

November marked a potential turning point in 2024 as inflation finally resumed a sustained downward path and central banks adopted more flexible policy language. Markets are increasingly pricing in synchronized rate cuts beginning in Q1 or Q2 2025. With volatility receding and liquidity improving, the outlook for risk assets has brightenedBrightness Capital & Asset Advisorybut economic uncertainty and geopolitical risks remain in play.

Brightness Capital & Asset Advisory maintains a constructive but disciplined stance, favouring quality growth, select cyclical sectors, and duration extension in fixed income. We continue to monitor macro and political catalysts closely as year-end positioning accelerates and 2025 rate expectations come into sharper focus.