2024 Year-In-Review
Tembusu Partners
A leading boutique private equity investment firm backing early to growth stage ventures across Asia.
As the year ends, it’s time to reflect on some of the most monumental happenings of 2024 and how they lay the groundwork for what is to come in 2025.
2024 has been an eventful year for global equities, with major indices experiencing robust price appreciation despite significant macroeconomic and geopolitical headwinds. The U.S. S&P 500 once again led the way with an outstanding 28% annual return, cementing its position as the world's most dominant equity market. Notably, the U.S. now contributes 50% of the GDP of the G7 economies and accounts for a staggering 70% of global stock market capitalization.
Donald Trump’s re-election to the presidency catalysed a rally in U.S. equities, with sectors like technology and automotive emerging as clear winners. Tesla’s stock surged, benefiting from strong vehicle deliveries and a bullish outlook on its energy business.
Artificial Intelligence (AI) was a major highlight of the year, with Nvidia temporarily becoming the world’s most valuable company, while Broadcom joined the $1 trillion valuation club, driven by rapid advancements in artificial intelligence (AI). Other star performers include Palantir and newly listed Astera Labs. Investors searching for the next major growth catalyst beyond AI have turned their attention to Quantum Computing Inc., driving its stock price to surge dramatically.
The Federal Reserve made its first-rate cuts in four years, beginning with 50 basis points (bps) in September, followed by 25 bps cuts in both November and December. However, persistent inflation kept rates at relatively elevated levels, maintaining the “higher-for-longer” narrative which may dampen confidence in corporate earnings growth.
In Japan, a wave of shareholder-friendly reforms fueled a corporate revival, coupled along with signs of healthy inflation propel the Nikkei 225 to record highs. This backdrop led the Bank of Japan (BOJ) to raise interest rates for the first time in 17 years. However, the hawkish stance led to the unwinding of yen carry trade and a violent sell-off in the Nikkei and KOSPI that eventually triggered circuit-breakers.
In contrast, South Korea's KOSPI faced significant headwinds, weighed down by political turmoil. The impeachment of the president following a surprise declaration of martial law eroded investor confidence and added to market instability.
The magnificent 7, comprising of Apple, Microsoft, Netflix, Tesla, Alphabet, Meta, Nvidia and Amazon, continues to showcase its dominance and economic moat following a slew of strong earnings and continue to outperform the rest of their peers and benchmarks.
Elsewhere, China’s stimulus announcement in September ignited a substantial rally of approximately 33% that lost steam and fizzles by mid-October as concerns about structural inefficiencies resurfaced.
Closer to home, Singapore’s Straits Times Index (STI) displayed resilience and growth, driven by robust loan growth and improved net interest margins from local banks, which constitutes to more than half the weightage of the STI (~53%), The Banks-and-REITs-heavy index is up almost 17% this year and this is largely attributed to the 3 local banks leading the charge, with DBS being the top performer at 44% due to handling larger loan books and robust earnings from higher interest rate conditions.
Political and geopolitical uncertainties remained central themes throughout 2024. The VIX, Wall Street’s fear gauge, experienced its second and third largest percentage spikes in history, reflecting investor anxiety over rising trade tensions, ongoing conflict in the Middle East, and uncertainty in U.S.-China relations.
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2024 marked a resurgence in M&A activity and IPOs, with notable deals across industries. Reddit, Astera Labs, and Viking Holdings went public, while significant M&A deals were observed in sectors ranging from technology to energy and big pharma. These rebounds highlighted growing investor appetite for strategic consolidation and innovation.
The commodities market presented a mixed bag of performance stories in 2024. Coffee emerged as the standout performer, with arabica futures soaring 70% year-over-year, driven by tight supply and rising demand. Conversely, lithium prices plummeted by 42.3% year-over-year as EV sales plateaued and production capacity expanded. Precious metals shone brightly, with gold repeatedly setting new all-time highs throughout the year driven by safe-haven demand amidst economic and geopolitical instability.
The bond market underwent a transformative year, shaped by a complex macroeconomic environment. Following years of high inflation, central banks around the world adopted divergent strategies. In the US, the Federal Reserve’s rate cuts lowered borrowing costs, driving a modest recovery in bond prices. However, yields on 10-year Treasuries remained elevated at an average of 4.3% for much of the year, reflecting lingering concerns about fiscal sustainability and inflation expectations.
In contrast, China’s bond market benefited from stimulus measures, with 10-year sovereign bonds yields at 1.7%. Europe’s bond markets faced mixed fortunes as economic stagnation weighed on investor sentiment, although Germany’s bunds offered stable, if muted, returns. Japan’s long-awaited rate hikes pushed bond yields higher, leading to steep losses for bondholders but signaling a pivotal shift in monetary policy.
The year highlighted the ongoing recalibration of global fixed-income markets, as investors navigated a landscape defined by inflationary pressures, geopolitical risks, and shifting central bank priorities. Looking ahead, the bond market’s performance in 2025 will hinge on how policymakers balance growth and stability amidst a rapidly changing economic backdrop.
In the currency market, the US dollar gained strength as Trump’s trade and immigration policies raised inflationary concerns, prompting the Federal Reserve to pivot towards a less dovish stance. This divergence from other central banks attracted significant capital inflows. With the US economy outperforming its peers—real GDP projected at 2.8% compared to the advanced economies' average of 1.8%—the dollar’s dominance remains unchallenged heading into 2025.
2024 also saw groundbreaking milestones in cryptocurrency, led by Bitcoin. The digital asset reached $70,000 in March following the SEC approval of Bitcoin ETFs back in January, breaching its previous all-time high of $69,000 last set in November 2021, and crossed $100,000 in December, driven by optimism surrounding Trump’s pro-crypto stance. Investors believe his administration will push for deregulation and coherent policies to support the burgeoning industry. MicroStrategy, a listed software company which is commonly viewed as a leverage Bitcoin play, saw even more impressive gains.
2024 also saw the return of meme stocks, with the likes of AMC Entertainment and GameStop rally surging as Roaring Kitty (Keith Gill) made his return. Elect-President Donald Trump’s media company – Trump Media & Technology Group, also rallied on speculations that trump will win presidency. ?
Overall, 2024 has been marked by uneven economic growth and significant political shifts. Central banks have effectively tackled global inflationary pressures but diverging monetary policies have caused notable currency fluctuations. Meanwhile, geopolitical tensions have escalated, and political uncertainty continues to persist. 2024 performance of global equities, commodities, bonds, and currencies highlighted the resilience and adaptability of markets amidst a complex macroeconomic environment. As we look ahead to 2025, we can expect significant uncertainty in Q1 at least given the new Trump administration is expected to announce a slew of new policies early.
Disclaimer: Tembusu Wealth Management is a multi-family office based in Singapore. If you would like to explore tailor-made yield or wealth management solutions out of Singapore, please reach out to us at [email protected]
Nothing herein constitutes investment advice - suitability of any investment or product will vary from person to person. Tembusu Wealth Management is a division of Tembusu Partners which is regulated by the Monetary Authority of Singapore.