Investment Review - January 2025
- The U.S. stock market powered higher in 2024 with major equity benchmarks posting double-digit returns amidst a positive backdrop of strong economic activity, robust corporate earnings growth and easing monetary policy. The S&P 500 total return was up 25%. Marking the best back-to-back two-year record in 25 years. The Dow Industrials rose 13.3% and the tech heavy Nasdaq Composite returned 29.6%.
- European stock markets dramatically lagged behind U.S. markets in 2024. The S&P European 350 Index was down 1.5% and the STOXX Europe 600 was up just 6%. The European Central Bank (ECB) will likely be cutting key interest rates four or five times in 2025 until rates are between 1.75% and 2%. Most Fed watchers and the FOMC itself may not yet foresee all of these global rates falling, as the recession in the eurozone’s largest economy, Germany, gets worse. The second-largest economy in the eurozone, France, is also slipping into a recession.
- Bonds provided positive, yet modest, returns last year. The Bloomberg Aggregate Bond Index returned 1.3% following a 5.5% return in 2023. The Ten-Year U.S. Treasury had a bumpy year, trading as low as a 3.6% yield to a high of 4.7%, ending the year just shy of 4.6%.
Key Investment Statistics
Sources: FactSet, Board of Governors of the Federal Reserve System, U.S. Department of Commerce, Federal Reserve Bank of St. Louis, U.S. Department of Labor
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