2024 Review: Key Events in Global Capital Markets
The year 2024 was marked by significant events that shaped global capital markets, spanning economic policies, geopolitical developments, and market dynamics across major economies, including the United States, Europe, China, and Malaysia. Below is a look at some of these pivotal events.
January
Bitcoin ETFs Approved: The US Securities and Exchange Commission (SEC) approved the launch of Bitcoin exchange-traded-funds (ETFs), spurring a financial rally and increasing cryptocurrency market participation.
February
China's Stimulus Measures: China implemented fiscal and monetary policies aimed at stabilizing its economy amid ongoing trade tensions and a slowing property market.
March
Bank of Japan Ends Negative Rates: The Bank of Japan ended the only negative rates regime by raising interest rates for the first time since 2007 from -0.1% to 0%-0.1%. Japan’s negative rates regime had been in place since 2016.
SBF Jailed: Samuel Bankman-Fried or SBF, the founder of the cryptocurrency exchange FTX and the cryptocurrency trading firm Alameda Research, was sentenced to 25 years in prison and ordered to pay $11 billion in forfeiture for his orchestration of multiple fraudulent schemes.
April
Geopolitical Tensions Escalate: Iran fired over 300 missiles and drones to Israel, marking the first direct attack between the two countries as a retaliation for the Israeli bombing of the Iranian embassy in Damascus on 1 April, which killed two Iranian generals. This was followed by Israel’s own missile strike response to Tehran.
May
Malaysia Hits RM2 Trillion Market Cap: On 7 May, the total market capitalization of all public listed companies in Malaysia breached RM2 trillion for the first time in history as local equities extended their rally since the start of 2024. Until May, all sectors posted positive year-to-date gains, led by Utilities, Construction, and Property.
June
Nvidia Surpasses Microsoft: Nvidia, which rose in value more than ninefold since the end of 2022, has surpassed Microsoft to become the most valuable public company in the world. The chipmaker passed the $3 trillion market cap mark in early June, joining Microsoft and Apple in that club. Apple, in December 2024, retook the lead as the company hit an all-time-high of $254.49 per share, putting the market cap at $3.85 trillion.
August
Global Market Sell-off: Markets experienced a significant downturn, erasing $6.4 trillion from global valuations, primarily due to uncertainties in financial and geopolitical priorities such as war, inflation, unemployment, and recession fears.
Bank of Japan Rate Hike: The Bank of Japan raised interest rates for a second time this year, ending the yen carry trade and contributing to global market instability.
September
Federal Reserve Rate Cut #1: The Federal Reserve slashed the interest rates by 50 basis points to a range of 4.75%-5% , easing monetary policy for the first time in four years. The central bank cut interest rates after holding them at a two-decade high in an aggressive bid to cool inflation.
China Stocks Surge: Chinese stocks saw the biggest single-day gains in 16 years in late September, as investors scrambled to join a searing rally sparked by Beijing’s latest raft of stimulus measures, ranging from outsized rate cuts to fiscal support in an attempt to shore up its ailing economy.
November
Trump's Re-election: Donald Trump's victory in the US presidential election influenced global markets, with US stocks and the dollar strengthening, while tariff-sensitive assets faced declines.
Federal Reserve Rate Cut #2: The Federal Reserve unanimously cut interest rates by 25 basis points to a range of 4.5%-4.75% in a widely expected move to arrest inflation concerns.
China's Capital Outflows: China experienced a record high capital markets outflow of $45.7 billion, exacerbated by Donald Trump's US presidential election win, reflecting growing investor apprehension amid economic challenges.
December
Bitcoin Surpasses $100,000: Bitcoin topped $100,000 for the first time in history in early December following a massive rally in the world’s most popular cryptocurrency, largely accelerated by the result of the US presidential election, in hopes that Trump would be able to push through legislative and regulatory changes to legitimize cryptocurrency.
Federal Reserve Rate Cut #3: The Federal Reserve concluded its final policy meeting for 2024 by cutting interest rates by another 25 basis points, lowering the interest rate range to 4.25%-4.5%. However, the summary of economic projections (SEP) delivered a major surprise as the FOMC now forecasts just two interest rate cuts (25 basis points each) in 2025, compared to five in the previous SEP from September.
Reflections on 2024 and Outlook for 2025 and Beyond
The year 2024 showcased the interconnected nature of global capital markets, influenced by economic policies, geopolitical events, and technological advancements. From central bank actions, including interest rate cuts in the US and Japan's shift to a rate hike, to China's continued economic challenges and Malaysia's landmark capital markets value of RM4 trillion, markets demonstrated resilience amidst volatility. Key sectors, such as technology, led by AI innovation, and energy, shaped by fluctuating oil prices, were focal points for investors. The re-election of Donald Trump in the US brought new policy uncertainties, especially in trade and international relations.
As we look to 2025 and beyond, several themes will likely dominate: the global response to inflation, evolving geopolitical alliances, advancements in clean energy and AI, and the impact of demographic and climate changes on markets. Investors should watch for shifts in monetary policy, particularly in the US and Europe, and China's economic reforms. In Malaysia, ongoing initiatives under Ekonomi MADANI and potential policy changes post-2024 may shape the investment landscape. Focusing on long-term investing and maintaining a disciplined approach, supported by innovative platforms like ASNB's Robo Investment Advisor (RIA), will be essential for navigating opportunities and challenges in the years ahead.