Market Wrap December 2024

November: Growth Assets Outperform

• Growth assets outperformed defensive assets over the month of November. The best performing asset class was Global Small Companies (unhedged) with the worst performing asset class Global emerging markets.

• Australian shares returned +3.8% over the month, gains from technology (+10.4%), consumer discretionary (+6.7%) and financials (+5.9%) sectors bolstered returns.
• Global Shares performed well led by U.S. equities with European and Japanese equities falling slightly over the month. Global Shares hedged returning +4.9% and Global shares unhedged returning +5.2%. Growth as a style outperformed both momentum and value with all three styles recording positive returns for the month.
• Global emerging markets fell 3.1% due to weak performance from Chinese equities which fell 4.0%, where China makes up ~30% of the index. Global small caps rallied +7.0% for the month as investors took profit from big tech and rotated into Global small caps due to their attractive valuations.
• Fixed income had a positive month with the Australian Fixed Interest market returning +1.1%, the global credit market was up with International Fixed Interest returning +1.2% for the month.
• Property and Infrastructure had a positive month with Global listed property (hedged) returning +3.2% and Listed Infrastructure (hedged) +3.2% for the month.
• The Australian dollar AUD was mixed against major currencies over the month. Most notably, the AUD fell -1.1% against the USD and also, fell 2.6% against the Japanese Yen.

Job Market

U.S.

• The annual unemployment rate in the U.S. ticked up slightly to 4.2% in November, up 0.5% from when the jobless rate was 3.7% 12 months prior.
• U.S. Non-farm payrolls rose by 227,000 in November, a significant increase from the month prior. Employment trended up in health care, leisure and hospitality, government, and social assistance.
• U.S. job openings increased, with the number of job openings at 7.7 million. Labor force participation decreased marginally to 62.5% in November.

Locally

• The Consumer Price Index (CPI) in Australia came in at 2.1% year on year (yoy) to October 2024. The largest sector increases came from Tabacco (+13.4%), Fruit and vegetables (+9.6%) and Rents (+6.8%).
• Australia's seasonally adjusted unemployment rate fell slightly by 0.2% to 3.9% in November 2024. Australia’s labour participation decreased to 67.0% in November, from 67.1% the prior month.