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Q3 of 2024 saw markets rise across the globe, in what was a quarter dictated by increased geopolitical tensions and evolving monetary policy. In contrast to Q2, the market increased its expectations that the Federal Reserve (Fed) was on track to achieve a soft landing as the quarter ended with the Fed cutting the cash rate by 50bps.
Australian equities bounced back in Q3, rising +7.79%. The combination of stock specific news from the Australian earnings season, the market paring back expectations for a rate rise, other central banks around the world beginning to cut rates, and the late quarter headlines out of China around stimulus measures, all provided Australian equities with the platform to rise.
During the quarter the best-performing sectors were Info Technology (+16.05%), REITs (+13.70%), Industrials (+9.33%) and Consumer Discretionary (+9.32%). The worst performers for the quarter were Energy (-9.00%), Utilities (- 3.25%) and Healthcare (-0.41%).
The best performing company for the quarter was Zip Co (ZIP), up a massive 88%, after the company reported their results, announcing margin expansion and momentum continuing in their Americas business. The worst performing stock was Star Entertainment Group (SGR), after the company was suspended and then resumed trading following delayed earnings, details of its debt facility, and an inquiry into the group that found its flagship Sydney casino remained unfit to operate. It finished the quarter down almost 40%.
The MSCI World ex-Aus Total Return index had a positive quarter but was one of the weakest performing market segments for the quarter as it rose 2.3%, with Utilities (+18.2%), REITs (+17.09%), and Financials (+10.72%) the best performing sectors. The worst performing sectors were Energy (-2.12%), Tech (+1.53%), and Communication Services (+2.83%).
US equities had varying strength over the quarter with quarterly earnings playing its part as well as the beginning of a rate cut cycle from the Fed. The S&P 500 rose 5.53%, the Nasdaq rose +2.57%, while the broader and rate sensitive Russell 2000 was the best performer rising +8.9%. European equities posted positive returns over the quarter, with the Euro Stoxx ending the month +2.93% while the FTSE rose +0.89%.
Infrastructure and Property outperformed throughout the quarter. Largely driven by the commencement of rate cuts worldwide and expectations growing for others to follow suit. Global Listed Property was the strongest performer, rising +13.52% while Global Listed Infrastructure rose +11.83%.
Fixed Income returns were also positive over the quarter as yields fell on the moves made by central banks globally as well as the expectations for further cuts. International Fixed Income rose +3.99%, while Australian Fixed Income rose +3.02%.
The US dollar index (DXY) had its worst quarter of the year, eroding all the performance for the year to date as it fell - 4.81%. The flip to this was the strong quarter for the AUD/USD, rising +3.64% to move above 69c at 69.13c, up from 66.7c at the close of the prior quarter.
Commodities had a poor quarter, with Brent crude price falling -16.94%, ending the quarter at US$71.77/barrel, down from $86.41/barrel. Iron Ore had a weaker quarter as well selling off to below US$100/t. Precious Metals were mixed with Gold continuing its strong year, rising +13.23% to close at US$2,634.58, while Silver followed suit rising +6.92%.
Important Information: This content is issued by Mason Stevens Asset Management Pty Limited, ABN 92 141 447 654 (MSAM).MSAM is a corporate authorised representative (CAR 461312) of Mason Stevens Limited, ABN 91 141 447207, AFSL 351578 (Mason Stevens). The information provided is of a general nature only and does not have regard to any individual’s personal objectives, financial situation, or needs. You should consider this information, along with all your other investments and strategies when assessing the appropriateness of the information to your individual circumstances. MSAM encourages seeking specific professional advice from a licensed financial adviser before making a decision to transact in relation to any investment, security, or strategy. Investment in securities including derivatives involves risks. Securities by nature will rise and fall and therefore past performance is not a reliable indicator of future performance. MSAM and its associates and their respective directors and other staff each declare that they may hold interests in securities and/or earn fees or other benefits from transactions arising as a result of information contained inthis communication. MSAM ensures that the information provided in this communication is as accurate and complete as possible but does not warrant itsaccuracy or reliability. References made to any third party, or their data is based on information that Mason Stevens believes to be true and accurate asat the date of this communication but is without independent verification. Opinions and or information may change without notice and Mason Stevens isnot obliged to update you if the information changes. Mason Stevens and its associated companies, authorised representatives, agents, and employeesexclude to the full extent by law, liability of whatever kind, including negligence, contract, fiduciary duties or otherwise, to investors or anyone else inrespect of any loss or damage, including indirect or consequential loss or damage, foreseeable or not, arising from or in connection with this information.
UA is committed to collaborating with and assisting our clients to achieve and surpass their financial goals. If you're considering your next move, be sure to contact us today!
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