Executive Summary

Global financial markets produced sharply divergent returns during November 2024 as investors responded to the United States presidential election, further central-bank easing and changing expectations for global trade and fiscal policy. US equities, the dollar and digital assets advanced strongly, while emerging-market shares, several international currencies and tariff-sensitive industries came under pressure.

Donald Trump secured a return to the White House, while the Republican Party gained control of both chambers of Congress. Markets initially interpreted the result as supportive for US corporate earnings because of expectations surrounding tax reductions, deregulation, increased domestic investment and a more business-friendly regulatory environment.

The S&P 500 delivered its strongest monthly return of 2024 and closed at record levels. The advance was broad, with small-capitalisation companies, financials, consumer discretionary businesses and industrial shares outperforming several of the mega-cap technology companies that had led earlier in the year.

Investors also considered the potential inflationary consequences of the incoming administration's policies. Proposed tariffs, immigration restrictions, tax reductions and continued fiscal deficits could support nominal growth but also limit the speed at which the Federal Reserve could reduce interest rates.

The Federal Reserve lowered its target range by 0.25 percentage points to 4.50%–4.75%. Chair Jerome Powell described the economy as strong and reiterated that future decisions would depend upon incoming inflation and employment data.

The Bank of England also reduced Bank Rate by a quarter percentage point to 4.75%. Policymakers warned that the UK government's October Budget could strengthen near-term demand and inflation, supporting a gradual approach to further easing.

European equities underperformed the United States. Weak regional growth, political uncertainty and concern about potential US tariffs affected exporters, automobile manufacturers and luxury-goods companies.

Chinese equities declined as investors awaited clearer evidence that fiscal and property-support measures would generate a lasting improvement in household confidence. The prospect of additional US tariffs also created pressure for manufacturers and technology companies.

Bitcoin reached record levels as investors anticipated a more supportive regulatory environment under the incoming US administration. Gold declined after its strong earlier rally as the dollar strengthened and investors shifted towards higher-risk assets.

Key Themes During November

• Donald Trump won the US presidential election.
• Republicans secured control of the White House and Congress.
• US equities produced a broad post-election rally.
• The S&P 500 recorded its strongest month of 2024.
• Small-capitalisation shares substantially outperformed.
• The Federal Reserve cut its policy range to 4.50%–4.75%.
• The Bank of England reduced Bank Rate to 4.75%.
• The US dollar strengthened against most major currencies.
• Bitcoin reached new record highs.
• Emerging markets faced pressure from tariffs and dollar strength.

Global Economic Overview

The global economy remained resilient during November, although regional differences became increasingly pronounced. The United States continued to expand at a healthy pace, while Europe remained close to stagnation and China struggled to strengthen domestic demand.

United States

US consumer spending, employment and service-sector activity remained broadly supportive. The economy continued to avoid the recession that had been widely anticipated during the earlier stages of the monetary-tightening cycle.

Inflation remained above the Federal Reserve's objective but had declined substantially from its peak. Housing and services continued to provide the most persistent price pressure.

Federal Reserve

The Federal Reserve reduced its target range by 25 basis points to 4.50%–4.75%, following the larger half-point reduction delivered in September.

Policymakers stated that risks to employment and inflation were broadly balanced. The central bank continued reducing its holdings of Treasury and mortgage-backed securities while lowering short-term policy rates.

Markets expected another reduction in December, although uncertainty increased as investors considered the potential inflationary consequences of tariffs, tax reductions and immigration restrictions.

US Political and Fiscal Outlook

The election result increased expectations of tax and regulatory changes. Investors anticipated that the incoming administration would seek to extend existing personal tax provisions, reduce corporate regulation and encourage domestic energy production.

Proposed tariffs could increase the cost of imported goods and components. Their final effect would depend upon their scope, implementation and whether trading partners retaliated.

Continued deficit spending also created uncertainty surrounding long-term Treasury supply and government borrowing costs.

Eurozone

Eurozone growth remained weak. Manufacturing continued to contract, while service-sector activity lost momentum. Germany remained particularly affected by industrial and automotive-sector weakness.

Inflation increased modestly from its October level but remained close enough to target to support expectations of another European Central Bank rate reduction in December.

Germany

Germany faced political and economic uncertainty after the governing coalition collapsed. Disagreement over spending, debt limits and economic policy increased the likelihood of an early federal election.

Automotive manufacturers continued to address high costs, weak Chinese demand and competition from electric-vehicle producers. Industrial restructuring became an increasingly prominent economic issue.

United Kingdom

The Bank of England reduced Bank Rate from 5.00% to 4.75%. Eight Monetary Policy Committee members supported the reduction, while one preferred no change.

Policymakers expected inflation to rise temporarily as energy-price comparisons became less favourable. The October Budget was also expected to support economic activity and increase employment costs.

Higher employer National Insurance contributions created concern that companies could respond by increasing prices, reducing hiring or limiting wage growth.

China

China introduced measures to address local-government debt and support financial stability. However, investors remained uncertain whether the policies would strengthen consumption and property demand sufficiently.

Retail spending showed selected improvement, but housing prices and new construction remained weak. The prospect of higher US tariffs increased uncertainty for exporters.

Japan

Japan continued to experience moderate inflation and wage growth. The Bank of Japan maintained its policy rate while signalling that additional increases remained possible.

The yen weakened following the US election as Treasury yields and the dollar rose. Currency depreciation supported exporters but increased import costs.

Global Outlook

The global economy entered the final month of 2024 with a reasonably favourable growth outlook but increasing policy uncertainty. US fiscal expansion could support demand while complicating inflation and monetary policy.

Potential tariffs and retaliation represented a significant risk for global manufacturing, trade and business investment.

Equity Markets

Global equity performance diverged significantly during November. US indices rallied after the election, while European, Chinese and broader emerging-market shares generally underperformed.

United States

The S&P 500 gained nearly 6% and completed its strongest month of 2024. The Dow Jones Industrial Average and Nasdaq Composite also reached new record levels.

The rally broadened beyond mega-cap technology. Financials, industrials, consumer discretionary businesses and smaller companies benefited from expectations of tax reductions, deregulation and stronger domestic activity.

Small-Capitalisation Companies

The Russell 2000 advanced sharply and approached its previous record. Smaller companies were viewed as potential beneficiaries of domestic tax policy, deregulation and protection from foreign competition.

They also remained sensitive to borrowing costs because of their greater dependence upon bank lending and refinancing. Rising longer-term yields therefore represented a potential offset to the positive policy outlook.

Financials

Banks and other financial companies were among the strongest performers. Investors anticipated a less restrictive regulatory environment, stronger merger activity and continued economic growth.

A steeper yield curve could improve lending profitability, although elevated long-term rates also increased credit and funding risks.

Industrials and Defence

Industrial companies benefited from expectations of domestic manufacturing investment and infrastructure spending. Defence businesses remained supported by geopolitical tensions and expanding government budgets.

Companies dependent upon imported components faced uncertainty surrounding tariffs and supply-chain costs.

Technology

Technology shares advanced but generally underperformed the strongest cyclical sectors. Artificial-intelligence infrastructure demand remained robust, while regulatory expectations improved for large digital platforms.

Semiconductor companies faced conflicting forces. Domestic manufacturing support and AI investment were constructive, while tighter technology restrictions and potential trade retaliation created risk.

Europe

European equities underperformed the United States. Exporters, automobile manufacturers and luxury-goods companies faced concern about tariffs and weaker global trade.

Banks and domestically focused businesses were supported by expectations of additional ECB easing. However, weak growth and political uncertainty limited broader enthusiasm.

United Kingdom

UK equities advanced during November, supported by financials, industrial companies and an improvement in global risk appetite.

The internationally oriented FTSE 100 remained affected by sterling and commodity movements, while domestic companies assessed the impact of higher employer taxes.

Japan

Japanese equities produced mixed returns. Exporters benefited from yen weakness, while companies dependent upon imported energy and materials faced higher costs.

Banks remained supported by the prospect of further Bank of Japan normalisation.

China and Hong Kong

Chinese and Hong Kong equities declined after the strong rally recorded during September. Investors remained concerned about property weakness and the potential effect of US tariffs.

Technology platforms and consumer companies retained low valuations, but confidence in the durability of domestic demand remained limited.

Emerging Markets

Emerging-market equities declined as the dollar strengthened and investors assessed the risk of US tariffs. Latin American and Asian markets both experienced pressure.

Indicative November Performance

Fixed Income Markets

Fixed-income markets produced mixed returns during November. Short-term yields reflected additional central-bank cuts, while longer-term government bonds remained sensitive to fiscal policy and inflation expectations.

US Treasuries

US Treasury yields initially rose after the election as investors anticipated stronger growth, tariffs and continued government borrowing. Longer maturities were particularly sensitive to the fiscal outlook.

Yields subsequently declined from their monthly highs as investors considered the appointment of a comparatively conventional Treasury secretary and continued Federal Reserve easing.

European Government Bonds

German Bunds benefited from weak economic data and expectations of another ECB reduction. Political instability in Germany and France created some uncertainty but also strengthened demand for high-quality sovereign debt.

UK Gilts

UK gilts responded positively to the Bank of England's rate cut, although concerns remained about inflation and higher government borrowing following the Budget.

Japanese Government Bonds

Japanese yields remained elevated relative to earlier years as markets anticipated another Bank of Japan increase. Yen weakness increased the possibility that policy normalisation would continue.

Investment-Grade Credit

Investment-grade corporate bonds remained supported by strong company fundamentals and investor demand. Credit spreads stayed tight, limiting the additional return available for accepting corporate risk.

High-Yield Credit

High-yield bonds benefited from the post-election equity rally and confidence in US growth. Default expectations remained contained.

Lower-quality borrowers continued to face refinancing costs substantially above those available before 2022.

Private Credit

Private-credit activity remained robust. Expectations of deregulation and greater merger activity supported demand for acquisition financing.

Competition among lenders continued to compress spreads for stronger borrowers. Investors monitored whether looser terms would reduce future recoveries during periods of stress.

Foreign Exchange

The US dollar strengthened substantially during November as investors anticipated stronger US growth, tariffs and a slower pace of Federal Reserve easing.

US Dollar

The dollar gained against most major and emerging-market currencies. Higher relative yields and the prospect of capital inflows into US assets provided support.

Euro

The euro weakened as economic data deteriorated and investors anticipated additional ECB rate cuts. Political uncertainty in Germany and France created further pressure.

Sterling

Sterling weakened against the dollar but remained more resilient against the euro. The Bank of England's cautious easing outlook provided some interest-rate support.

Japanese Yen

The yen weakened as US yields rose and carry trades regained appeal. Expectations of another Bank of Japan increase limited the decline.

Chinese Renminbi

The renminbi faced pressure from tariff risk and continued domestic monetary support. Authorities acted to prevent rapid or disorderly depreciation.

Emerging-Market Currencies

Emerging-market currencies generally declined. The Mexican peso and several Asian currencies were affected by concern about tariffs and changing US trade policy.

Commodities

Commodity markets produced mixed returns. Gold declined after its record-setting rally, while oil and industrial metals remained affected by uncertainty surrounding global demand.

Oil and Energy

Oil prices traded within a relatively narrow range. OPEC+ delayed plans to increase production, while weak Chinese demand limited the market's upside.

Geopolitical risks remained elevated but did not result in a sustained interruption to physical supply.

Gold

Gold declined as the dollar strengthened and investors moved towards equities and digital assets. Profit-taking followed the metal's substantial gains earlier in the year.

Central-bank demand and geopolitical uncertainty continued to support its longer-term investment case.

Copper and Industrial Metals

Copper remained under pressure from uncertainty surrounding Chinese demand and global tariffs. Long-term demand from electricity networks, renewable energy and data centres remained constructive.

Iron Ore

Iron ore remained volatile as investors balanced Chinese support measures against continued weakness in residential construction.

Agricultural Commodities

Agricultural markets produced mixed returns. Coffee and cocoa remained elevated because of supply concerns, while several grain markets were influenced by harvest expectations.

Digital Assets

Digital assets were among November's strongest-performing investments. Bitcoin reached successive record highs as investors anticipated regulatory change and greater institutional adoption.

Bitcoin

Bitcoin approached the psychologically significant $100,000 level after the US election. Spot ETF inflows, expectations of a more supportive administration and reduced concern about restrictive regulation drove demand.

The incoming administration was expected to appoint regulators more open to digital assets and reconsider enforcement-focused policies.

Ethereum

Ether advanced but generally lagged Bitcoin. Investors anticipated that regulatory change could improve the outlook for staking, decentralised finance and tokenisation.

Digital-Asset Companies

Cryptocurrency exchanges, miners and businesses holding substantial Bitcoin reserves rallied alongside token prices.

Mining companies continued balancing Bitcoin exposure with opportunities involving data centres and high-performance computing.

Risk Considerations

• Prices incorporated substantial optimism regarding regulatory change.
• Leverage increased as the market rallied.
• ETF flows could reverse during weaker sentiment.
• Policy proposals remained subject to legislative and regulatory implementation.
• Digital assets remained exceptionally volatile.

Private Equity

Private-equity sentiment improved during November as the US election result increased expectations of deregulation, lower corporate taxation and stronger merger activity.

Deal Activity

Financial sponsors anticipated a more favourable environment for acquisitions and exits. Healthcare, software, financial services, infrastructure and industrial technology remained active sectors.

Uncertainty surrounding tariffs created greater caution for companies dependent upon international supply chains.

Financing

Credit markets remained open, while the Federal Reserve's additional rate cut offered gradual relief for floating-rate borrowers.

Longer-term borrowing costs remained elevated because of fiscal and inflation expectations. Sponsors continued using more equity than during the previous low-rate cycle.

Exits

Strong public markets improved the potential IPO environment. Sponsors also anticipated that reduced regulatory barriers could support corporate acquisitions and sponsor-to-sponsor transactions.

Fundraising

Fundraising remained selective. Established managers with strong realised performance continued to attract the greatest institutional demand.

Private Credit

Private lenders anticipated greater acquisition-financing demand. However, stronger competition and a possible return of bank lending risked reducing spreads and covenant protections.

Secondaries

Secondary-market activity remained strong as investors sought liquidity and diversified exposure to mature private assets.

CE Global Private Equity Observations

• Deregulation could support deal and exit activity.
• Tariff uncertainty required detailed supply-chain analysis.
• Lower short-term rates offered gradual borrower relief.
• Long-term financing costs remained comparatively high.
• Operational improvement remained essential to investment returns.

Artificial Intelligence & Technology

Artificial intelligence remained a major investment theme, while the election created expectations of a less restrictive US regulatory environment.

Semiconductors

Demand for advanced processors, high-bandwidth memory and networking remained strong. Data-centre customers continued expanding infrastructure for training and operating AI models.

Tariffs and export controls represented important risks. Restrictions could affect both sales to China and the cost of imported components.

Cloud Computing

Cloud providers continued to invest heavily in data centres and proprietary processors. Enterprise demand remained strong, although investors required greater evidence of returns on capital expenditure.

Enterprise Adoption

Businesses expanded generative-AI applications within coding, customer support, sales and document analysis. Governance and integration remained central challenges.

Power Infrastructure

Electricity access remained one of the principal constraints on data-centre development. Investment increased across generation, grids, cooling and backup power.

Regulation

Investors anticipated that the incoming administration could reverse or modify parts of the federal approach to AI regulation. State, European and sector-specific rules would continue to apply.

Technology Risks

• Tariffs could increase hardware and component costs.
• Export controls could restrict international semiconductor sales.
• Capital expenditure could exceed near-term AI revenue.
• Electricity constraints could delay data-centre projects.
• Regulatory divergence could increase compliance complexity.

Sector Spotlight

US Financial Services

November's sector spotlight examines US financial services following the strong post-election rally and expectations of a less restrictive regulatory environment.

Banks

Large banks could benefit from increased merger activity, stronger capital markets and a more favourable approach to capital requirements.

A steeper yield curve could support lending margins, although higher long-term borrowing costs also increased credit risk.

Investment Banking

Private-equity exits, corporate acquisitions and equity issuance could support advisory and underwriting revenue after two subdued years.

Asset Management

Rising markets increased assets under management and fee revenue. Alternative investment managers could benefit from improved fundraising, transactions and realisations.

Insurance

Insurance companies benefited from higher investment yields and premium pricing. Natural-catastrophe losses and claims inflation remained important risks.

Financial Technology

Payments, digital banking and financial software continued to offer structural growth. Lower regulatory pressure could support innovation, while consumer-protection and cybersecurity requirements remained significant.

Private-Market Opportunities

• Specialist insurance distribution
• Wealth-management consolidation
• Payments and compliance technology
• Fund administration
• Private-credit servicing
• Financial data and analytics

Investment Perspective

US financial services could benefit from stronger capital markets and regulatory change. Investors nevertheless needed to assess credit exposure, interest-rate sensitivity and the risk that expected policy changes would be delayed or diluted.

Regulatory Update

November's election result created expectations of significant change across financial, environmental, technology and digital-asset regulation.

US Regulatory Outlook

Investors anticipated a reduction in federal regulation affecting banks, energy companies, mergers and digital assets. The final changes would depend upon appointments, agency procedures and congressional action.

Digital Assets

The expected departure of existing regulatory leadership increased optimism that the United States would adopt clearer rules for exchanges, token classification and custody.

Artificial Intelligence

Companies continued preparing for the EU Artificial Intelligence Act regardless of possible US policy changes. International businesses faced an increasingly fragmented regulatory environment.

Trade and Tariffs

Businesses began modelling the effect of proposed tariffs on China and other trading partners. Supply-chain location, contractual pricing and customer pass-through became important considerations.

Private Markets

Private-fund managers continued to face requirements involving valuation, conflicts and investor disclosure. Expectations of US deregulation did not remove obligations in Europe, the UK or individual states.

Compliance Priorities

• Model exposure to alternative tariff scenarios.
• Monitor US agency appointments and regulatory priorities.
• Continue preparations for EU AI Act obligations.
• Review digital-asset custody and trading policies.
• Maintain independent private-asset valuation processes.
• Assess sanctions and geopolitical supply-chain exposure.

Looking Ahead

Markets entered December with strong US equity momentum, record digital-asset prices and expectations of additional central-bank easing. Investors also faced uncertainty surrounding tariffs, inflation and future fiscal policy.

Federal Reserve

The Federal Reserve was expected to consider another quarter-point reduction in December. Inflation, employment and updated policy projections would determine the outlook for 2025.

European Central Bank

The ECB was expected to reduce rates again as regional growth weakened. Investors would focus on whether policymakers considered a larger move necessary.

Bank of England

The Bank of England was expected to proceed cautiously after its November reduction. The effect of the Budget on wages, prices and demand would remain central.

US Policy Transition

Cabinet and agency appointments would provide greater information about taxation, tariffs, energy, financial regulation and digital assets.

Corporate Earnings

Companies would begin providing guidance regarding the effect of potential tariffs and changes in corporate policy. AI investment and consumer demand would remain important themes.

China

Investors would assess whether authorities introduced further fiscal support before year-end. Property sales, household confidence and trade relations remained critical.

Digital Assets

Bitcoin's approach towards $100,000 increased both institutional interest and correction risk. Regulatory appointments and ETF flows would remain major drivers.

Private Markets

Greater political clarity could support deal pipelines and IPO preparation. Sponsors would nevertheless need to incorporate tariffs, higher long-term yields and policy uncertainty into underwriting.

CE Global Private Equity Perspective

November demonstrated how political change can rapidly alter expectations across equities, currencies, digital assets and regulation. The US outlook became more supportive for selected domestic companies but more uncertain for international trade.

The post-election rally broadened market leadership and improved the potential environment for transactions. However, valuations increasingly reflected optimistic assumptions about taxation, regulation and economic growth.

CE Global Private Equity believes that financial services, infrastructure, cybersecurity, healthcare and specialised domestic industries could benefit from the evolving policy environment. Businesses dependent upon imported goods or global supply chains require greater caution.

Within private markets, lower short-term rates and improved exit confidence are constructive. Conservative leverage and scenario analysis remain essential because tariffs and fiscal policy could maintain inflation and long-term borrowing costs.

This market review is provided for general information and discussion purposes only. It does not constitute investment, legal, tax or other professional advice, nor an offer or solicitation to purchase or sell any security, financial instrument or investment product. Market values can rise or fall, and past performance is not a reliable indicator of future results.