J.P. Morgan – Review of Markets Over the Third Quarter of 2024

In the third quarter of 2024, most major asset classes saw healthy returns despite bouts of market volatility. Factors such as weaker US economic data, an interest rate hike from the Bank of Japan, and thin summer liquidity initially impacted stocks in early August. However, the Federal Reserve's rate cutting cycle in September, along with a less hawkish tone from Japanese policymakers and new stimulus in China, helped ease investor concerns and lead to a strong rally in stocks by the end of the quarter. Developed market equities delivered a 6.5% return, with small caps and global REITs outperforming. Fixed income markets were buoyed by the prospect of lower rates, while commodity performance was more muted. The Federal Reserve initiated its cutting cycle in September with a 50 bp move and indicated a desire to move interest rates back to less restrictive levels. Other central banks, such as the European Central Bank and the Bank of England, also cut rates in response to cooling inflation and muted economic activity. Market pricing for future interest rates shifted during the quarter, reflecting changes in the perceived rate outlook.