Market & Portfolio Update - November 2024
The Global equity market had a strong month, up +3.8%, driven by the US. Trump won the US election early in the month, which bolstered investor optimism surrounding potential corporate tax cuts. Furthermore, expectations for de-regulation boosted the US financials and energy sector, while the industrial sector was seen as one of the main beneficiaries of tax cuts and trade policy.
Central banks globally continued to lower rates during November. England and the US central banks both lowered their respective rates by 0.25% in response to falling inflation.
Moving closer to home - the Reserve Bank of New Zealand continued their interest-rate cutting cycle, reducing the Official Cash Rate from 4.75% to 4.25%, marking the second 0.50% cut in a row. The Reserve Bank noted households and businesses have not been spending as much as usual, however, lower interest rates should encourage households and businesses to spend more, supporting economic growth. The NZ share market didn’t move much in reaction to the cut, as it was widely expected by the market. Nonetheless, the NZ share market index returned a healthy +3.4% in November, bringing the year-to-date return to +11.8%.
A look back at when the world feared the worst
On August 2, 1990, the world woke up to a grim headline: “Iraq Invades Kuwait; Oil Prices Soar, Markets Plunge.”
Saddam Hussein's forces had crossed into Kuwait, triggering fears of a prolonged conflict in the oil-rich Middle East.
The immediate market reaction was swift and severe.
Lifetime Book Club: The Let Them Theory
In a world where we spend so much energy trying to control outcomes, manage other people’s opinions, and keep everything on track, this book offers a different approach. One that suggests peace comes not from controlling more, but from letting go.