Festive cheer appeared to come early for investors as November saw global markets record their strongest monthly rally in three years. This solid performance was on the back of growing certainty that the world’s major central banks may start cutting interest rates next year.
The MSCI World Index rose 9.4% in November, its best month since November 2020 when news of a breakthrough in the race to develop a COVID-19 vaccine sent markets soaring. In the US, after posting three consecutive months of losses, US markets had a stellar month, with most indices erasing losses since July. The Nasdaq soared 10.7% in November, the S&P 500 was up 8.9%, and the Dow Jones rallied 8.8%. South Africa followed suit, with the JSE All Share Index up 8.4% in November. Industrials led the charge (+10.4%), followed by Financials (+8.6%) and Resources (+5.9%).
Given the shifting sentiment throughout the course of this year, most investors would be pleased to be ending the year on a positive note. This is a far cry from prevailing sentiment just a year ago, when talks of rising interest rates and a looming global recession dominated forecasts. But while forecasts are not as dire this time around, it is important to remember that forecasts are not fact and much of what was predicted for this year did not occur. Therefore, rather than attempting to predict market conditions over the next year, our focus will remain on identifying and investing in high quality companies, and then remaining invested for the long-term. This is an approach that continues to serve our clients well.
Read more in the latest Prosperity by Private Clients, which gives a monthly market and economic update as well as an overview on recent developments within some of the companies held in our model portfolios.