As we move into 2025, Matt Henderson, Portfolio Manager, reviews 2024 asset markets with a look at equities and fixed income as well as a look ahead to interest rate cut expectations for major central banks.

In our final video of the year, Kevin Kidney, Head of Investments and Sebastian Mackay, Investment Director, reflect on the last twelve months in markets. They also discuss what the upcoming year may bring with  President Elect Donald Trump and how US policy could shape global markets.

Kevin Kidney, Head of Investments, looks at the Federal Reserve’s decision to cut interest rates by 0.25% and the impact that this and the 2025 policy revisions have had on bond and equity markets.

Sebastian Mackay, Investment Director, looks at rising government debt and the implications both in the US and UK given the economic climate of each country. The counterpart to this a fall in private sector debt and how that interplays with government debt laid out through a case study from the US in the the mid 1990’s.

Paul Durrans, Investment Director, looks at the latest UK wage growth data which despite a lagging economy, surprised analysts by exceeding expectations. While wage growth is supportive for greater consumption, it is inflationary and if UK inflation figures come in stronger than the expected 2.6%, the market may challenge Bank of England Governor Andrew Bailey on the current 1% interest rate cut planned in 2025.

This week, Matt Henderson, Portfolio Manager, looks at the last major week in financial markets before the end of the year which provides insight on Europe and Japan’s PMI data, US inflation and UK employment. The Federal Reserve and the Bank of England also have meetings this week with market expectations favouring a 0.25% for the US and for the UK to hold.

This week, Chris Leyland, Director of Investment Strategy and George Bell, Portfolio Manager, cover the European Cenral Bank’s interest rate decision as well as an update on US inflation figures. Staying with America, the team recap the recent NFIB Small business Survey which paints an optimistic picture for US business growth and finish with updates from China on monetary policy.

Sebastian Mackay, Investment Director, looks back to the start of 2024, the interest rate trajectory of the UK and how that compares to now. Sebastian also puts this into a more global context, examining how European and US central banks have navigated inflation.

Chris Leyland, Director of Investment Strategy, looks at the NFIB Small Business Optimism Index, which came in at its highest reading since June 2021. The election signalled a major shift in economic policy with hopes for favourable tax and regulation policies which could benefit a broad scope of US business, will this surge of optimism from small business continue? 

Paul Durrans, Investment Director, focuses on China’s economic trajectory after President Xi Jinping promised further measures to reinject life and market optimism into the economy. Since September after an initial round of stimulus measures, investor confidence has faded. China continues to be challenged by both domestic and international issues. Time will tell if the additional measures will be enough to accelerate growth.