November 2024 Investment Summary

A positive month for the Active range with returns ranging from +0.51% for Active 1 to +1.72% for Active 5.
*P Acc share class with data sourced from FE analytics as at 29 November 2024.

November 2024 was a better month for portfolios generally.

Most major equity markets saw gains in November, with global stocks rising back to all-time highs. Chinese stocks pared back last month’s gains. The Nasdaq and S&P 500 rose from last month, with the S&P 500 increasing 5.4% and Nasdaq 7.5%. Financials and Consumer Discretionary led the sector specific performance, while healthcare continued to lag. The FTSE 100 made smaller gains of 1.7%, with markets recouping losses from the fallout of October’s UK budget announcement. The Stoxx Europe 600 Index was flat this month with Information Technology and Communication services the top two sectors registering a positive return over the month.

Donald Trump was announced as the new US President at the start of November, with a Republican party sweep secured. Government bond prices were higher as the ten-year Treasury yield lowered to 4.18% from 4.28% over the month, hovering at seven week lows, with investors concerned that Trump’s policy proposals could be inflationary. Federal Reserve chair Jay Powell stated the Fed will wait and see how Trump’s plans unfold before it makes policy adjustments. “The decisions we’re making right now are not about that” “they’re about what’s happening in the economy now”. It remains prepared to respond, if labour market data weakens unexpectedly, with markets pricing a further 0.25% cut at the next meeting in December at 87%.

US labour market data this month showed payrolls increased by 227,000 in November, higher than forecast. It marks a strong recovery from October’s weak “hurricane affected” jobs report - the weakest since December 2020, and highlights the current labour markets resilience. US retail sales, measuring the quantity of goods bought, rose slightly more than expected while consumer confidence rose for the fifth month running to a seven-month high, as household expectations for business conditions and personal finances improved after the US Election. Unemployment data increased to 4.2%, from October’s four month low of 4.1%.

Tensions in the Middle East and the prospect of further escalation in the region have subsided somewhat. A US-brokered ceasefire has taken effect in Lebanon raising hopes of an end to the year- long conflict between Israel and Hezbollah. The agreement calls for an initial 60-day ceasefire and the withdrawal of the Lebanese militant group and Israeli troops from southern Lebanon. The conflicts impact still remains limited on the global economy as Brent Crude prices remain range-bound rising to $74/barrel from $73/barrel in November.

Central banks cutting cycles have been rapidly reassessed in recent weeks, following stronger data, fiscal/policy uncertainty and some stickier inflation. A robust US economy, with the potential for increased spending and tax cuts, should be good for risk assets, but regional differentiation could be larger than usual, with decoupled economic cycles and the potential for trade wars. Heightened geo-political tensions remain a significant near-term risk.

WS Prudential Risk Managed Active - Tactical asset allocation activity

We currently have an equity overweight of +1.35%, made up of a diversified basket across the US, UK, Asia and GEM. This is funded from small underweights in US Credit, European credit and cash. We also hold small overweight positions in US Treasuries, UK Gilts and Real Estate (REITs).