Monthly Market Review
December 2024
Looking back on 2024, global markets were shaped and impacted by many key events. Central bank interest rate cuts, the rise of Artificial Intelligence (AI), ongoing geopolitical tensions, elections in over 64 countries (which included Donald Trump’s return) and South Africa’s new Government of National Unity, to name but a few. Despite these challenges, markets navigated the complexities, showcasing moments of resilience and opportunities for inflation-beating returns.
Global markets concluded December with a sense of caution, with developed markets (DM) experiencing a 1.7% decline in the MSCI World Index. This did little to detract from a strong year, as DM equities rose 19.2% overall. Emerging markets (EM) fared better in December, increasing by 1.04%, but underperformed for the year by only gaining 8%. In South Africa, the FTSE/JSE Capped SWIX Index fell 0.3% in December, recording its third consecutive monthly decline. However, the index closed the year with a 13.4% gain.
LOCAL MARKETS
Exhibit 1 | Local performance (ZAR) for December 2024
Note: Data illustrated in ZAR. Source: FundFocus. Data as at 31 December 2024. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
South Africa
Economy
In November, headline inflation ticked up to 2.9% year-on-year, a modest 0.1 percentage point increase from October’s figure. Core inflation, which excludes volatile items, softened to 3.7% year-on-year, down 0.2 percentage points from the previous month. Both measures remained comfortably below the midpoint of the South African Reserve Bank’s (SARB) target range of 3% to 6%. Key domestic developments in the fourth quarter of 2024 included the SARB cutting the repo rate to 7.75%, continuing its easing cycle. Despite a weaker December, the rand emerged as the fourth best-performing major currency against the US dollar in 2024, depreciating by a modest 2.6% year-on-year.
Equity Markets
South African equities ended 2024 on a challenging note, with December marking the third consecutive monthly decline. The FTSE/JSE SWIX Top 40 Index slipped 0.7% in December but managed to achieve a strong annual gain of 10.7%, demonstrating resilience despite setbacks late in the year. Mining stocks were the biggest contributors to December’s decline, dropping 5% during the month and closing out a tough year for the sector with an 11% loss. Weak metal prices took a toll on platinum miners, as platinum fell 9% over the year and palladium plunged by 17%.
In contrast, stocks tied to the domestic economy posted modest gains in December, up 0.25%, finishing the year with a remarkable 21% increase. Industrial counters also fared well, with the Indi-25 Index advancing 2.2% for the month and 14.4% for the year.
Top Performers
- Barloworld Limited: 24.9%
- Datatec Limited: 11.5%
- Tiger Brands Limited: 9.5%
Bottom Performers
- Sibanye Stillwater Limited: -19.8%
- Impala Platinum Holdings Limited: -17.6%
- Harmony Gold Mining Co. Ltd: -12.6%
Bond Markets
In December, the All-Bond Index (ALBI) delivered a return of -0.35%, weighed down by weakness at the longer end of the yield curve. Despite this, South African bonds outperformed equities for the second consecutive year, with the JSE All Bond Index achieving an impressive 17.2% year-on-year return.
GLOBAL MARKETS
Exhibit 2 | Global performance (base currency) for December 2024
Note: Data illustrated in base currency. Source: FactSet. Data as at 31 December 2024. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
United States
In December, the US Federal Reserve lowered its policy rate by 0.25%, bringing the total rate cuts since September to 1%. Despite this, the Fed maintained a hawkish tone, signalling fewer rate cuts in 2025 and highlighting persistent inflation concerns. US equity markets had mixed performances in December, with the Nasdaq 100 gaining 0.4%, while the S&P 500 and Dow Jones fell by 2.5% and 5.3%, respectively. Despite the mixed performance in December, all major indices posted solid gains for the year, driven by resilient consumer spending and a robust labour market.
United Kingdom
The UK equity market gave back November’s gains, with the FTSE 100 declining by 1.4% in December, ending 2024 with a 5.7% annual return. Inflation climbed to 2.6% in November, its highest in eight months, while core inflation rose to 3.5% year-on-year from 3.3% in October.
Europe
European equity markets ended the year on a mixed note, with Germany’s DAX rising 1.4% in December and delivering an 18.8% gain for 2024, while France’s CAC gained 2.0% for the month but ended the year down 2.2%. Eurozone inflation increased to 2.2% year-on-year in November from 2.0% in October. The European Central Bank (ECB) delivered its fourth rate cut for 2024 in December, reducing the benchmark rate to 3.0%.
Asia
Asian equity markets closed December in positive territory, supported by economic measures and improving sentiment. In China, stimulus efforts (including interest rate cuts and housing incentives) overshadowed ongoing concerns. The Hang Seng rose 3.3% in December, with a full-year gain of 17.7%. The Shanghai Composite added 0.8% in December, wrapping up the year with a 12.7% increase. Meanwhile, Japan’s Nikkei climbed 4.4% in December and 14.2% for the year. Inflation in both countries showed signs of a gradual uptick, while PMI figures indicated steady growth in China’s manufacturing and service sectors.
Commodities
Commodities delivered mixed performances in December. Brent crude oil rose 2.3%, driven by falling US stockpiles and optimism over China’s economic growth plans but ended 2024 down 3.1%. Gold dipped 0.7% for the month but surged 27.2% for the year as central bank purchases and safe-haven demand supported prices. Among platinum group metals, platinum fell 4.5%, palladium dropped 7.2%, and rhodium remained flat in December. Iron ore declined 1.2% in December and 25.3% over the year, pressured by China’s sluggish property market and weak demand.
In Conclusion
December marked a challenging end to an otherwise strong year for global markets. While equity markets retreated due to year-end profit-taking and cautious central bank outlooks, 2024 delivered impressive gains, driven by resilient US economic growth, the AI boom, and strong corporate earnings. Commodities presented mixed results, with gold shining as a safe-haven asset, while oil and industrial metals faced demand concerns. Emerging markets saw renewed optimism late in the year, particularly in China, as stimulus measures began to take effect. 2024 showcased the power of innovation, adaptability, and selective investment opportunities, offering long-term investors valuable lessons for navigating evolving market landscapes.
