Market Commentary 1 July 2024 - 30 September 2024
Broad diversification continues to support your portfolio returns with foreign share markets performing well compared to the domestic market, which has had more modest returns over the past year.
Most major economies continued to focus on delivering an economic ‘soft landing’ – i.e. cooling high levels of demand and inflationary pressures without pushing their economies into recession. For this reason, the US Federal Reserve announcement on 18 September was noteworthy, as it finally began easing the Federal Funds Rate with an initial cut of 0.50%. This meant the US now joined the ‘rate-cutting club’ already occupied by the European central bank, Canada, UK and New Zealand and their actions clearly highlighted that the pathway for global interest rates is now downwards, at least for now.
Finally, while the approaching US election will increasingly dominate media bandwidth over the coming weeks and months it is important to remember that historically election outcomes have had relatively benign market impacts, especially when one considers the wider economic cycle.