Monthly report for October 2024

The YTD return of P+ Balance accounted for 7.73 percent as of 31 October which is a 1.4 percentage points decrease compared to the end of September.

The month's portfolio returns accounted for -0.3 percent for credit bonds, -1.0 percent for special investments, -1.1 percent for bonds, -1.5 percent for real assets and -1.8 percent for equities. 

October was a volatile month for markets where both risky assets and bonds delivered negative returns. The stock market dropped across sectors with small caps being the worst hit due to decreasing economic momentum, while bonds performed negatively due to expectations about fewer rate cuts and uncertainty about the US election. Despite the weak development in October, risky assets have continued to deliver significantly positive returns in 2024. This has i.a. been driven by increased expectations to future earnings, and so far the companies have delivered strong Q3 results with the S&P 500 companies growing earnings by almost 10 percent compared to last year based on reporting from more than 60 percent of the companies.

The US economy grew by 0.7 percent in Q3 compared to Q2, driven by increased consumer spending. 

The US inflation rate ended at 2.4 percent in September, the lowest since 2021, while the core inflation rate remained high at a level of 3.3 percent. 

In Q3, GDP growth in the Eurozone was 0.4 percent compared to Q2 which was the highest increase in 2 years. At the same time, the inflation rate rose to 2.0 percent driven by i.a. the energy prices. Along with the the year's third interest rate cut of 25 basis points, the ECB lowered the deposit rate to 3.25 percent which was expected by the markets.  

In the coming period, focus will be directed towards the coming US administration where ministerial appointments, foreign policy announcements and economic plans from president Donald Trump may have significant impact on the financial markets.