3Q 2024 Market and Economic Overview

The third quarter of 2024 was marked by sharp market movements and high volatility. The report noted that technology companies, particularly those involved in artificial intelligence, had been trading at elevated valuations, which prompted caution among market participants. An announced share sale by the chief executive of Nvidia added to those concerns, although the report noted that insider sales can occur for reasons unrelated to a company's business outlook. A wave of profit-taking followed in July, particularly among mega-cap technology companies, and there was a rotation towards value sectors such as utilities, financials and consumer staples. Equity prices rebounded strongly from the lows of early August, supported by a solid earnings season and stable economic data, and key indices reached new highs.

In the US, inflation and the labour market showed signs of cooling. Consumer prices grew more slowly, fewer new jobs were added and wage growth moderated. The Federal Reserve, which had been notably cautious until then, cut its policy rate by 0.50% at its meeting on 18 September, a larger move than the quarter-point cut many market participants had expected. At the time of the decision, inflation stood at 2.5% and the unemployment rate at 4.2%. The report noted that the Fed's dual mandate, a 2% inflation target and employment stability, guided its decisions.

Tensions in the Middle East escalated significantly during the quarter, involving Israel, Hezbollah and Iran. The report described a series of strikes and counterstrikes between Israel and Hezbollah, a bombing campaign in southern Lebanon and, on 1 October, the launch of 200 missiles by Iran toward Israel. It noted that these developments raised concerns about the stability of the region.

Energy markets were also affected. OPEC member countries attempted to support oil prices by cutting production, but an economic slowdown in the US and weak economic data from China continued to weigh on global demand for oil, which kept price gains limited. The report also discussed the outlook, including the pace of central bank easing and the geopolitical risks described above.

Important information: This snapshot summarises MWC Group's market commentary for the period shown and is provided for general information only. It is not investment, tax or legal advice, a personal recommendation, or an offer or solicitation to buy or sell any investment, and it does not take account of your personal circumstances. Views and figures reflect conditions at the date of publication and may since have changed. Past performance is not a reliable indicator of future results. The value of investments and any income from them can fall as well as rise, and you may get back less than you invested. Exchange-rate movements can affect returns. Market data comes from third-party sources believed to be reliable, but its accuracy cannot be guaranteed. Please seek personal advice before making any investment decision. Issued by Manentia Wealth Consulting Group Limited (C80087), licensed by the Malta Financial Services Authority.