Tech Surges and Rate Decreases: Your Q3 2024 Market Performance Roundup
At the start of the year, we gave you a rundown of the Q4 market performance for 2023. And can you believe it, we’re already heading into the final quarter of this year.
With the US elections just gone, Q3 of 2024 was a pivotal period for investors. Here’s our roundup of insights on trends, market performance, and economic factors that could help you make more informed decisions about where to invest your money in the final quarter of 2024.
Pour a cup of tea because, like last time, we’re starting with the UK.
FTSE performance 📈
UK equities experienced a decent rebound in Q3, driven by easing inflation and the Bank of England’s cutting interest rates. The FTSE 100 index –that’s the UK’s 100 highest-capitalised listed companies– climbed overall, with smaller and mid-cap companies accounting for much of this.
Utilities light the way 💡
Utilities and real estate sectors turned up the heat, with utilities gaining, and real estate stocks rising, too.
On the other hand, energy stocks lagged, declining due to falling oil prices and concerns over global demand.
Inflation slowing down 🎈
Inflation has been a worry for many for a long time. The rate dropped to 1.7% in September, reinforcing hopes that the Bank of England may have finished its series of rate hikes.
The economic landscape 🌄
Revised GDP figures showed a more resilient economy than previously thought, with Q3 growth clocking in at 0.3%. Could this lead to continued optimism among investors? Well, as an investor yourself, that’s up to you.
Next, pack your road-tripping outfit because we’re heading Stateside.
S&P 500 rocketship 🚀
US shares rose significantly in Q3, fueled by an aggressive rate cut from the Federal Reserve, often called The Fed. The S&P 500 –which is similar to the FTSE 100 or the FTSE 250– climbed to new heights, rising to near its pre-2022 record as hopes for continued economic growth took centre stage.
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Inflation insights 💹
The annual US inflation rate slowed for a sixth consecutive month in September, down to 2.4%. This decline played an important role in the Fed's decision to cut rates by 50 basis points*, with more cuts anticipated in the coming months. *Basis Points are units used to measure percentage change. One Basis Point is equal to 0.01%.
Tech stealing the show (again) 🤖
While tech stock performance was mixed overall, giants like Apple (AAPL) and Tesla (TSLA) performed well. Meanwhile, the energy sector, as we mentioned in the UK, faced a decline due to the aforementioned drop in oil prices.
Let’s hop on a flight back to Europe.
Europe is listening 👂
Investor optimism rose as the European Central Bank signalled potential interest rate cuts amid the softening inflation rates we’ve already mentioned.
Economic fluctuations 🌊
While GDP growth in the Eurozone was 0.4% for Q3, manufacturing activity showed signs of weakness, indicating a complex economic backdrop that investors are watching closely. But then complexity in global markets is nothing new.
Sector spotlight 🔍
Real estate and utilities sectors really stood out. However, the information technology sector struggled.
Here are some of the standout stocks from Q3 of 2024:
And why, yes, they do look a lot like The Magnificent Seven. Here’s their current market cap.
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You’ll find these brands in several of our ETFs, including: The AI, The Techie, and Join The Metaverse.
World’s most valuable 🥇
Towards the end of October, chip-making giant Nvidia surpassed Apple to become the world’s most valuable company, with a market cap of $3.41 trillion. Do any of these results surprise you? Let’s delve deeper into some of the key trends and sector performances.
Tech Titans reign supreme 👑
The "Magnificent Seven," including Microsoft and NVIDIA, continued to dominate the market with significant year-to-date returns. NVIDIA surged in Q3 to become the world’s most valuable company, driven by strong earnings and continued demand in the AI space.
Energy sector struggles ⚡
While communications and financial sectors posted modest gains, energy stocks struggled as oil prices dipped. We mentioned this earlier in both the UK and US sections. The energy sector saw a decline, reflecting ongoing concerns about demand and global economic slowdowns.
Real estate revival 🏡
Real estate stocks benefited from the prospect of lower interest rates. This sector's performance highlights the growing investor confidence in property markets, particularly as borrowing costs decrease (if, as mentioned, we expect the Bank of England to lower rates).
Looking ahead to Q4 👀
As we move into Q4, keep an eye on interest rate developments, corporate earnings, and sector performance. These factors will be crucial in shaping market dynamics as we approach year-end.
Capital at risk. This is not financial advice. Always do your research before investing. Past performance is not an indicator of future gains.
