Written by: Trek Investment Committee
As 2024 comes to a close, we at Trek Financial want to take a moment to express our deepest gratitude. Your readership and engagement have meant more to us than words can fully convey. Reflecting on the past year, we’re reminded that our journey is about much more than markets or metrics—it’s about stories, connections, and diverse perspectives. Every insight shared, and every milestone covered, has been fueled by your engagement. Thank you for being part of this ongoing conversation.
A Year of Momentum and Milestones1,2
This year has been remarkable for financial markets. As of November 30th, The S&P 500 achieved a year-to-date return of approximately 27%, marking one of its most robust performances in recent history. This growth reflects a combination of strong corporate earnings, supportive fiscal policies, and renewed investor confidence.
Notably, all market sectors posted gains in November, with cyclical sectors such as Consumer Discretionary, Financials, and Industrials leading the way. This broad-based momentum underscores the market’s resilience and adaptability amid a complex macroeconomic environment.
Global Economic Insights3,4,5,6,7
The global economy presented a diverse picture in 2024. India, for instance, experienced a slowdown, with GDP growth decelerating to 5.4% in the third quarter—the slowest pace in nearly two years. This deceleration was largely due to lower output in manufacturing and other sectors.
China’s economy showed signs of recovery, driven by targeted fiscal measures and a rebound in manufacturing. In December 2024, Chinese leaders concluded the Central Economic Work Conference, outlining strategies to boost the economy amid external pressures, including potential U.S. tariffs. Plans include increased government spending, relaxed monetary policies, and efforts to stimulate consumer and investment spending. The government aims to address slowed economic growth, real estate crises, and COVID-19 impacts through subsidies, affordable housing, and lower interest rates.
However, broader concerns persist. China’s high local government debt and a rapidly aging population present significant challenges. The country’s macro leverage ratio has risen, with general government debt projected to reach 61.3% of GDP by the end of 2024, up from 56.1% in 2023. Demographically, cities like Fushun exemplify the strain, facing economic decline due to an aging population and low birth rates, threatening long-term economic stability.
These dynamics highlight the interconnected nature of global economies and underscore the importance of a nuanced approach to international investments.
Looking Ahead to 2025
As we step into 2025, the financial landscape is poised for continued evolution. Anticipated developments in fiscal policies, trade agreements, and technological advancements are expected to shape the year ahead. However, challenges such as inflationary pressures, geopolitical tensions, and market volatility remain on the horizon.
While past years with strong momentum, such as 2024, have historically led to tempered performance, it’s important to recognize that each market cycle is unique. Understanding the shifting dynamics of financial markets can provide valuable context as we reflect on the past and consider the possibilities ahead.
Balancing Opportunity with Caution
The lessons of 2024 emphasize the importance of balancing optimism with caution. Diversification, risk management, and an evidence-based approach will be key in navigating potential market shifts. While the S&P 500’s performance offers a positive note, it also serves as a reminder of the unpredictability of markets.
As we look ahead to 2025, we remain committed to providing thoughtful analysis and meaningful stories. Whatever the new year may bring, we are ready to explore it together, guided by the same curiosity and connection that brought us here. Here’s to shared discovery and another year of exploration!
Sources:
- https://www.statmuse.com/money/ask/s-and-p-500-year-to-date-returns-in-2024-through-november-30-2024
- https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/s-p-500-rises-5-7-in-november-to-log-best-month-of-2024-86615491
- https://invezz.com/news/2024/11/29/is-india-missing-its-demographic-dividend-slow-growth-raises-concerns/
- https://tradingeconomics.com/india/gdp-growth-annual
- https://apnews.com/article/china-economy-trump-xi-jinping-tariffs-9c2ce50ec9dd511587bee3d5a1b6a4b8
- https://www.fitchratings.com/research/sovereigns/fitch-revises-outlook-on-china-to-negative-affirms-at-a-09-04-2024
- https://www.wsj.com/world/china/china-elderly-aging-babies-fertility-coal-mines-43c0b34f
Disclosure:
This overview presents a cautious interpretation of current economic indicators and their potential implications for investors. It’s important for investors to remember that market conditions are inherently uncertain and subject to change. The information provided here should not be considered as personalized investment advice or a prediction of future market movements. Investors are encouraged to consult with their financial advisor to discuss their individual financial situation and goals. A comprehensive investment strategy should consider the investor’s risk tolerance, investment time horizon, and any changes in economic conditions.
Investment Advisory Services offered through Trek Financial LLC, an investment adviser registered with the Securities Exchange Commission. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein. Trek 24-412