Investment market commentary
Commentary by Anne O’Doherty, Head of Life & Pensions
As we close out 2024, it’s safe to say that global markets have delivered strong performances across most major asset classes, capping off a year defined by resilience amid complexity. Despite ongoing geopolitical tensions, persistent inflationary concerns, and varying economic trends, investor sentiment has stabilized during the latter part of the year. Recession risks have largely diminished in Ireland and abroad, though market volatility remains a key feature of the investment landscape.
Ireland: What is the current position?
The Irish economy continues to demonstrate robust growth, supported by strong exports and easing inflationary pressures. Irish CPI inflation ended the year at 2.4%, helped by moderating energy costs and targeted government interventions. However, housing remains a critical issue, with the House Price Index up 10.1% despite ECB rate cuts, reflecting continued supply constraints. Measures introduced in the 2024 Budget are expected to bring some relief, but meaningful impacts are unlikely before mid-2025.
The Irish stock market posted solid annual gains, led by the tech and pharmaceutical sectors. and there continues to be strong investor confidence in these high-growth industries. However, weaker consumer sentiment weighed on retail and service sector stocks. With government formation talks still ongoing, political developments may bring further shifts to the overall outlook.
Global Market Developments
Global equities reached new peaks in 2024, with the S&P 500 climbing 37.82%, reflecting the unexpected resilience of the U.S. economy. Strong consumer spending and a tight labour market were key drivers, though inflation remains stubbornly above target. Across Europe, where economic growth was sluggish, markets displayed more mixed results. Persistent inflation and cautious ECB policies shaped market dynamics with some sectors like industrial and export-orientated more buoyant than others.
China’s economy continued to underperform expectations, with its recovery hindered by property market struggles and weak export demand. Meanwhile, the UK, althought benefitting somewhat from the energy sector was weighed down by slower economic growth. Finally in the U.S., the Presidential Election sees a switch from the Democrats to the Republicans and Trump taking on the leadership reigns this month which could have a large bearing (in any direction!).
Looking Ahead to 2025
As we move into 2025, Central Bank policies, inflation trajectories, and geopolitical events continue to remain key market drivers. Ireland’s economic resilience and strong export sector position it well, though challenges in housing and consumer sentiment persist. It’s about getting a balance. Globally, diverging economic trends may present opportunities for those with diversified portfolios.
Despite continued uncertainty, we remain optimistic about the long-term prospects for investors. Maintaining a well-diversified portfolio and adhering to a clear investment strategy remain essential for navigating uncertain times.
If you need expert assistance with financial planning and wealth management, please contact us at Xeinadin Financial Services.
2024 key economic indicators
Economic stats – Ireland – year to year
Irish CPI Inflation | 2.4% |
ECB Base Rate | 3.25% |
Irish Unemployment Rate | 4.3% |
House Price Index | 10.1% |
Market returns
Eurostoxx 50 | 20.9% |
German DAX | 30.25% |
Euronext Dublin | 14.73% |
S&P 500 | 37.82% |
FTSE 100 | 11.83% |
Currency values (year-end)
EURO/USD | €1 = $1.08 |
EURO/GBP | €1 = £0.83 |
Sources: Tradingeconomics.com / marketwatch.com
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