Donald Trump’s historic return to the political stage in 2024 reignited market enthusiasm, setting the tone for a quarter marked by optimism and growth. Trump’s decisive victory not only delivered a Republican clean sweep but also shattered months of media forecasts, with a surge in investor sentiment swiftly following. Markets rallied on expectations of deregulation, lower corporate taxes, and the promise of technological innovation driving productivity gains. This surge in confidence drove US risk assets and the dollar higher, while mega-cap growth stocks led the charge, particularly as fears of government intervention in the technology sector dissipated.
Bob Farrell’s classic investment axiom—”when all the experts agree…something else is going to happen”—proved prophetic. The unexpected election outcome, coupled with strong economic performance, created fertile ground for US equity markets to soar. The S&P 500 hit a remarkable 70 record highs in 2024, fuelled by growing confidence in American exceptionalism and optimism for AI-led advancements.
Global and Domestic Contrasts Shape Investment Dynamics
While US markets thrived, other regions struggled with political instability and economic challenges. Europe’s political landscape was rocked by the collapse of coalition governments in Germany and France, highlighting structural issues in these major economies. Germany’s manufacturing sector, once the pride of its economy, faced existential challenges, while France contended with escalating debt and the aftermath of a credit downgrade. Across the Atlantic, the UK grappled with a stagnant economy, inflationary pressures, and policy missteps under the new Labour government, eroding market confidence.
Meanwhile, Asia presented a mixed bag. China’s targeted stimulus measures offered hope for economic stabilisation, while Japan’s corporate governance reforms continued to attract investor interest. India remained a long-term growth story, but near-term market froth and valuation concerns moderated its performance.
Central Banks and Bond Markets Drive Volatility
Central bank policy decisions added complexity to the investment landscape. In the US, the Federal Reserve adopted a cautious approach, with interest rate cuts slowing amidst robust economic data. However, Fed Chair Jerome Powell’s remarks on inflation uncertainties tempered market expectations for further easing in 2025. The European Central Bank took a more dovish stance, signalling additional rate cuts, but political instability overshadowed these efforts. UK markets reflected growing concerns over fiscal policy and stagnant growth, with the Bank of England maintaining a steady rate path.
Bond markets exhibited volatility, with long-term yields rising despite easing measures, reflecting concerns over fiscal deficits and inflation. This shift underscored the need for diversified strategies in fixed-income portfolios.
Commodities Shine Amid Geopolitical and Market Shifts
Gold continued to prove its value as a hedge against volatility, recording strong gains driven by central bank purchases and geopolitical uncertainty. Silver benefited from robust industrial demand, particularly in renewable energy sectors, while oil prices rebounded on improved fundamentals and seasonal demand.
A Diversified Approach for 2025 and Beyond
TEAM’s investment philosophy, grounded in medium-to-long-term trend analysis and diversification, has positioned its portfolios to capitalise on market opportunities while mitigating risks. US mega-cap growth and technology stocks remain central to the strategy, complemented by allocations to infrastructure equities, small-cap stocks, and select international markets. Exposure to commodities and intermediate-dated bonds provides additional balance, ensuring resilience against economic and policy-driven volatility.
As the world navigates an evolving economic landscape, TEAM remains focused on identifying sustainable growth opportunities while maintaining a disciplined approach to diversification. The year ahead promises both challenges and opportunities, but with a robust framework and a long-term perspective, TEAM is well-equipped to deliver for its investors.
TEAM plc (LON:TEAM) is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM’s core skill of providing investment management services.
