How are markets doing halfway through 2024?

As 2024 gets to its half-way stage, we look at the different performance of global markets as the technology sector continues to dominate.

| 6 min read

As we hoped, 2024 has been a year of good returns for most equity markets so far. Interest rates have started to fall, with many investors looking forward to more cuts to come. China’s recovery is making modest progress, emerging from the long Covid-19 lockdown. The monetary squeeze in the US and Europe has brought inflation down. The US fiscal boost provided sufficient offset to the Federal Reserve to allow continuing US growth. Europe is looking forward to a better performance as rates start to edge down and the world economy grows a bit more.

Markets have been led once again by the US digital giants, which have grown revenues and profits and made much of the arrival of artificial intelligence (AI). The one thing investors could rely on was the energy and innovation of these crucial companies continuing to add to the wealth and income of the world. There are bigger debates about how much broadening of market success there will be, as investors identify apparently cheaper sectors and countries as possible investment opportunities.

Year-to-date performance

In equities, there was a wide range of outcomes depending on where you invested. The Taiwanese main index performed very well, rising more than 28% - and the Nasdaq Composite has been strong, up more than 20%. Japan has done well in yen terms, with the Nikkei index gaining more than 18%. The US S&P 500 index has delivered 15.5%.

The losing end of the world market has included Brazil, down 8%, and Mexico, down 10%, with the clean energy sector struggling. The Chinese stock market has not responded well to the economic recovery underway across the country.


The UK investor has seen the pound and dollar stay close to each other. The euro has declined by 2.5% against the pound, and the yen has fallen 11%, so UK investors in Japan only made good money there if they had covered the currency risk.

Will performance broaden out?

The good performance of Taiwan owes much to the growth and high rating of Taiwan Semiconductor Manufacturing Co (TSMC), one of the world’s top ten companies. It is moved by similar forces that have powered the rise of the US technology giants and works closely with them. Japan has been boosted by the idea that Japanese companies will with government encouragement become more profit oriented in their management approach, and by the kindling of modest inflation in Japan after years of deflation. People want some wage growth to fuel more consumption.

The emerging markets indices have been mixed, as the groups of countries within them are not performing together and are subject to different pressures and influences. The commodity producers have suffered a bit recently from weakness in several leading commodities apart from precious metals. The Latin American leaders have been weak as they struggle to control inflation and public budgets. China, the largest part of the wider index, has been disappointing. Taiwan has led, and India and South Korea have put in reasonable performances.

More of the emerging markets will benefit as world growth expands and if the dollar weakens as US rates come down. Traditionally emerging market countries borrow in dollars and need lower rates and dollar weakness to make their debts more affordable. They tend to benefit from faster rates of growth in world trade, and from exporting to the more advanced countries. This is going to take time, as rate cuts in the USA have been delayed, and they are slow in Europe.

China is the dominant emerging market economy. The country seems to be settling for growth of 4-5% after a sustained period of much higher rates. This reflects the achievement of higher living standards making the base a more challenging starting point. Above all, it reflects the reliance of past growth on an overextended property sector based on credit.

It is still necessary to be selective over emerging markets.

The government decision to rein in property speculation and to reduce the debts of the property sector has provided a substantial headwind to Chinese growth. The authorities are gradually transferring assets to state bodies and allowing debts to be repaid or cancelled. They wish to promote higher quality growth, as they call it – making some more credit and grants available to build a newer economy based on technology. They also are spending on defence and internal control through their digitalisation strategies.

Argentina has embarked upon an important change of policy to try to get on top of inflation after a long period of excess spending, borrowing and monetarisation of debts. The President was elected on a platform to take a chain saw to state spending as many voters took fright at the continuing rapid erosion of their savings. Many faced difficulties in getting their pay to keep up with prices.

So far, he has made substantial reductions in state spending, getting the budget into surplus over the last four months. He has devalued the currency substantially which has led to an improved balance of trade with a sharp fall in imports. Inflation has been very high as the first-round impact was to remove subsidies and price controls and hike prices, but the rate is now subsidising fast. The International Monetary Fund (IMF) is supportive and has released more of their loan.

It is still necessary to be selective over emerging markets and to recognise the different forces at play on them. Markets overall are liking the gradual monetary easing and signs of recovery where growth has been suppressed. Whilst technology has been dominant, some other sectors and geographies are now beginning to deliver better returns. As interest rates fall and monetary policy is eased in several important economies, so other sectors can start to perform better.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

How are markets doing halfway through 2024?

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