The US election results were the primary driver of market performance in November. US equity markets rallied as Donald Trump emerged as the clear winner and is well-positioned to advance his legislative agenda following a ‘red sweep’ by the Republicans. Equities were buoyed by expectations that his policy programme will lift growth, lower taxes and cut regulation, although emerging markets came under pressure amid worries over trade tariffs.
UK
- UK equities rose 1.7% (FTSE All Share) over the month as sterling weakened significantly off the back of Trump’s victory, while increased merger and acquisition activity started to provide positive news for UK investors.
- The Bank of England (BoE) cut rates as expected by 0.25% to 4.75%, although since the Budget expectations for future cuts have reduced to two before June 2025.
- Figures by Rightmove showed average house listings in November 2024 fell by 1.4% (£5,366) to £366,592 due to budget uncertainty. Despite this, annual growth is 1.2%, aligning with forecasts of a 1% rise for 2024.
- Following Ben Bernanke’s independent review, the BoE announced they will reform how the Bank makes decisions and communicates them, with forecasting better reflecting the economy’s current dynamics.
Global
- US equities surged over 7.4% (S&P 500 in GBP) during the month, comfortably ahead of other regions, as markets rallied around Trump’s pro-business stance.
- The Federal Reserve (Fed) followed through with a 0.25% rate cut, bringing interest rates into a 4.5%-4.75% range.
- Investors in Europe remain ‘risk-off’ due to political uncertainty in Germany and France related to disputes over fiscal spending and debt. The FTSE World Europe-UK Index was down over 1% for the month.
- China continued to drip-feed its fiscal support package into the economy, with $1.4 trillion aimed at refinancing local government debt.
Fixed interest
- In the UK, gilts rallied over the month as the BoE cut interest rates, but the month also saw strong demand for gilt issuance as investor confidence in government debt contributed to the rally.
- US treasuries marginally benefitted from rate cuts over concerns that Trump’s policy proposals could reignite inflation. The 10-year Treasury yield ended the month slightly lower, dropping to 4.17%.
- Within corporate bonds, spreads tightened, especially in US high yield where they remain at historical lows, influenced by Trump’s expected pro-business policies aimed at stimulating growth.
Other
- After the US election, the broader cryptocurrency market saw positive momentum leading to new all-time highs. Bitcoin gained 37% in November and Ethereum 47%.
- A further reduction of Russian gas deliveries to Europe and the surprising closure of a large liquid natural gas plant in Australia helped gas prices increase by more than 20% in November.
- In precious metals, the price of both gold and silver fell in November.
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This article is for general information purposes only and does not constitute financial advice or a personal recommendation. Past performance is not a reliable indicator of future results. Investments can rise or fall in value, and you may receive less than you originally invested. Tax treatment depends on individual circumstances and may change in the future.
