Monthly report for November 2024

The YTD return of P+ Balance accounted for 10.43 percent as of 30 November which is a 2.5 percentage points increase compared to the end of October.

The month's portfolio returns accounted for 1.1 percent for credit bonds, -0.4 percent for special investments, 1.5 percent for bonds, -0.4 percent for real assets and 3.2 percent for equities. 

The result of the US election was one of the motivating forces behind the market developments in November. Donald Trump's election victory and the Republicans majority in both chambers of Congress created expectations that the incoming administration could provide a boost to US economy. The prospects of tax cuts, an expansionary fiscal policy and increased protectionism lifted the US equity markets. Especially small-cap stocks which are more exposed to the domestic market were among the biggest winners. The healthcare sector, however, experienced a more modest increase due to concerns about the incoming administration's impact on the pharmaceutical industry. 

Besides expectations for president-elect Donald Trump's policy priorities, the positive market reaction likely also reflected a relief over a swift and unambiguous result. Outside the US, the election result was met more cautiously. Emerging markets underperformed compared to the developed markets, and Chinese equities dropped due to fear of future trade conflicts. At the same time, investors remained sceptical about whether China's fiscal and monetary easing policies are sufficient to support significant economic growth.

The key economic indicators from the US in October were mixed. However, recent business surveys and labour market data painted a more positive picture for November. The core inflation remained unchanged with an annual increase of 3.3 percent in October. In Europe, inflation was somewhat lower than expected in November, with core inflation in the Eurozone at 2.7 percent against expected 2.8 percent. Combined with weaker than expected PMI figures for the Eurozone, this resulted in the market having greater confidence that the ECB can continue a gradual interest rate cut and potentially lower the interest rate to around or slightly below neutral. 

In the coming period, focus will mainly be on geopolitical developments. The Trump administration's foreign policy is still unclear and may impact relations between the US, Europe and China considerably. Focus will, to a great extent, be on which political agendas Donald Trump prioritises first (e.g. tax reliefs or tariffs), while his previous statements about the Ukraine war will focus on how he actually plans to end it.