October 2024 witnessed an overall positive performance in global financial markets, driven by accommodative monetary policies and a gradual improvement in investor sentiment. Recent decisions by major central banks, coupled with a stable geopolitical backdrop, contributed to a favorable environment for risk assets, despite lingering macroeconomic risks.
Equity Markets
Global equity markets continued their recovery trend initiated in September, buoyed by growing optimism around a potential “soft landing” for the U.S. economy and encouraging macroeconomic prospects. The MSCI World Index recorded a monthly increase of 2.4%, led by the technology, consumer discretionary, and industrial sectors.
In the United States, the S&P 500 ended the month up 3.1%, primarily driven by strong performance in technology and healthcare companies, reflecting investors’ preference for high-quality growth stocks.
In Europe, equity markets benefited from expectations of economic stability: the Euro STOXX 50 rose by 1.8%, supported by the prospect of further accommodative measures from the European Central Bank, including potential rate cuts by year-end. Industrial and consumer goods sectors gained from rising domestic demand and expectations of increased infrastructure spending.
Fixed Income Markets
The fixed income segment showed signs of improvement, supported by expectations of accommodative monetary policies and a stabilization in yields. Government bonds experienced a decline in yields, particularly in shorter maturities, reflecting investors’ anticipation of a prolonged low-interest-rate environment. Investment-grade bonds and high-quality debt attracted institutional investors due to the relative stability they offer in an environment of heightened uncertainty. This segment remains a strategic choice to balance returns and capital preservation, serving as a reliable tool to mitigate portfolio volatility.
Commodities
In the commodities market, gold continued its upward trend, consolidating its position as a safe-haven asset and nearing all-time highs. The precious metal benefited from demand as a hedge against inflation and market volatility. Conversely, oil prices remained under pressure, affected by seasonal demand weakness and production policies of key exporting nations.
Monetary Policies
Global monetary policies in October 2024 supported financial markets and economic growth, driven by the accommodative approach of major central banks. In the United States, the Federal Reserve gradually reduced interest rates to stimulate the economy, enhancing liquidity and boosting investor confidence while alleviating recession fears.
In Europe, the European Central Bank reaffirmed its commitment to expansionary measures, with potential further rate cuts expected by year-end. These actions aim to encourage investments and improve credit access, supporting cyclical sectors and enhancing market sentiment.
Outlook and Risks
October 2024 marked a phase of stability and recovery in financial markets, reinforcing positive investor sentiment. However, risks persist, including the upcoming U.S. presidential elections and ongoing geopolitical tensions, which could add to market volatility.
In this environment, a diversified and cautious approach remains essential to capitalize on opportunities in high-quality assets while balancing returns with effective risk management.