Market Update October 2024


Global Share Markets
Global share markets delivered mixed performance in October. While hedged global shares declined by 0.9%, unhedged global shares delivered a robust 4.5% return. This variance highlights the significant impact of currency movements on international investments. The U.S. economy, which has been a key driver of global market performance, may finally be showing signs of slowing after a period of remarkable resilience. Real-time GDP measures suggest growth has moderated to around 2% this quarter, down from nearly 3% in Q3, with the October labour market report indicating weaker-than-expected payroll growth.
New Zealand Shares
The New Zealand share market has demonstrated resilience, posting a 1.7% gain for the month and an impressive 18.4% return over the last year. The strong performance of the local market suggests improved investor confidence in New Zealand's economic prospects and corporate earnings potential. Business optimism is rising rapidly, with October's ANZ Business Outlook reaching its highest confidence levels since 2014, indicating the economy's downturn may be easing.
NZ Fixed Interest
Bond markets have faced challenges in the short term, with both New Zealand and global fixed interest experiencing negative returns over the past month. New Zealand bonds declined by 0.6%, while global bonds hedged to the NZ dollar fell by 1.5%. However, the longer-term picture remains positive, with New Zealand fixed interest delivering an 11.2% return over the past year and global bonds returning 9.4%. In the United States, market expectations for short-term interest rates have reduced with expectations for future interest rate cuts.