Market Update - Month Overview (November 2024)

Summarised by Shara Cox (Report via Zenith)

November 2024 marked a pivotal month for global and Australian markets, driven by political shifts and economic trends. Donald Trump’s election victory fuelled U.S. equity surges, while Australian markets followed, sustained by strong banking and tech performances. Zenith has produced a report detailing the key market movements, economic indicators, and global influences shaping the financial landscape during November. We have summarised the key information in this article. 

International Markets

Global markets showed strong performance in November, significantly influenced by Donald Trump’s election victory in the United States. The S&P 500 surged over 6% during the month, crossing the 6000 mark, contributing to a year-to-date gain of 27.9%. Trump’s administration, with its pro-growth agenda, proposed regulatory easing and corporate tax cuts, which boosted investor confidence. However, trade concerns and tariffs dampened some optimism, particularly in emerging markets, where the MSCI index fell 3.6% for the month. Europe struggled with weak growth and political instability, with the Eurozone PMI indicating contraction. Despite these challenges, the MSCI World ex-Australia index gained 4.6% in USD terms, translating to a 5.6% return in AUD due to the Australian dollar’s depreciation.

In terms of sectors, technology and energy were significant contributors, while financials also performed well, spurred by reduced regulation prospects. Global bonds saw mixed outcomes, with U.S. 10-year yields initially rising but retreating by month-end, driven by Trump’s Treasury Secretary nominee, Scott Bessent, who introduced a moderated economic outlook. Meanwhile, Trump announced aggressive tariffs on China, Canada, and Mexico, aimed at curbing illegal activities, further underscoring the geopolitical complexities impacting markets.

Domestic Market

Australian equities reflected solid growth, with the ASX 200 Accumulation Index climbing 3.8% in November and achieving a 15.1% year-to-date gain. The market benefited from U.S. momentum but lagged behind the American indices. The financial sector led the gains, with bank stocks rising 5.7% for the month, contributing to a 35.8% year-to-date increase. The technology sector also outperformed, gaining over 10%, while materials declined by 2.8% due to weaker-than-expected fiscal stimulus in China.

Economic indicators were generally supportive. Inflation dropped to 2.1%, its lowest since July 2021, thanks to significant reductions in electricity prices due to government rebates. However, core inflation remained at 3.5%, keeping the Reserve Bank of Australia cautious about rate cuts. Employment data indicated stability, with unemployment at 4.1% and modest wage growth easing to 3.5%.

RBA Governor Michele Bullock highlighted Australia’s unique policy stance, balancing inflation and employment objectives. Despite broader global easing trends, Australia’s tight Labor market and restrained policy differentiation remained focal points. While earnings growth expectations were muted, stretched valuations—particularly in the banking sector—posed challenges for sustained market momentum.