Fintuity Market Summary January 2025

In December, European equities declined as losses in healthcare and utilities overshadowed gains in technology sectors. Meanwhile, the European Central Bank (ECB) hinted at a shorter period of restrictive monetary policy. In the UK, markets struggled due to weak economic data, persistent inflation, and stagnating growth. Across the Atlantic, US equities ended the month on a negative note despite Federal Reserve rate cuts, as inflation remained elevated. Asia Pacific equities also saw declines due to political instability, but emerging markets experienced gains, driven by strong performances in regions like Asia and the Middle East.

Key Takeaways:

• Revised data confirmed the UK economy did not grow in the third quarter of the year.
• The US added 227,000 new jobs in November, though unemployment rose slightly.
• Emerging markets saw gains, led by Asia Pacific, with notable contributions from the Middle East and emerging Europe.

Europe

European equities ended December lower, capping a year of modest returns. Losses were led by declines in healthcare and utilities, while technology and consumer discretionary sectors recorded gains. A notable market drag came from weak obesity drug data in the healthcare sector.

The ECB reduced its deposit rate by 25 basis points (bps), signalling reduced inflation concerns and a potentially shorter period of tight monetary policy. Growth forecasts for 2025 were revised down to 1.1%. Structural economic challenges remain in Germany, whereas Spain demonstrated strong growth potential. The German Ifo Business Climate Index dropped, and political uncertainty emerged with a snap election following the collapse of a coalition government.

For those looking to find a financial adviser near me for navigating European investments, an independent adviser can offer valuable insights and protection during such volatile times.

The UK

UK equity markets closed December in negative territory, reflecting disappointing data and the Bank of England’s (BoE) stance on future interest rate adjustments. Inflation rose to 2.6% in November, driven by higher fuel and clothing costs. The BoE held interest rates steady at 4.75%, signalling that persistent inflation is likely to delay further rate cuts.

Economic growth in the UK contracted by 0.1% in October, with stagnant services and declining production output contributing to the slowdown. Consulting a certified financial adviser or an independent adviser near me can help individuals and businesses understand the implications of such economic challenges, particularly regarding pension protection and other financial priorities.

The US

US equities closed December on a weak note, with the S&P 500 and Russell 2000 indices declining, while the NASDAQ Composite posted slight gains. The Federal Reserve lowered interest rates by 25bps to 4.5% in December but indicated a slower pace of cuts in 2025 due to persistent inflation concerns. The consumer price index (CPI) rose to 2.7%, while core CPI remained steady at 3.3%.

The US economy added 227,000 jobs in November, and GDP growth for Q3 was recorded at 3.1%. For investors seeking the best financial adviser near me to navigate such dynamics, choosing a professional with expertise in US markets and investment strategies can make a significant difference.

Asia

Asia Pacific markets declined in December, influenced by political turmoil in South Korea and concerns over the Federal Reserve’s monetary policy direction. However, Taiwanese equities advanced due to gains in AI-related stocks, while Chinese equities rose on expectations of stimulus measures and public spending in 2025. Australia’s market faced pressures from slower-than-expected US rate cuts, while Indian equities saw declines.

Japanese markets showed strength, supported by a weaker yen. The region’s mixed performance underscores the importance of engaging a top independent financial adviser to identify opportunities and provide tailored investment protection services.

Emerging Markets

Emerging market equities posted gains in December, led by robust performances in Asia Pacific, the Middle East, and emerging Europe. Brazil saw declines as its central bank raised interest rates by 100bps, while Turkey cut its policy rate, boosting market sentiment. Strong oil prices and earnings supported growth in the Middle East. Meanwhile, Poland experienced modest declines, and Hungary and the Czech Republic faced ongoing economic challenges.

Emerging markets can offer attractive investment opportunities, but they require careful analysis. Engaging the best independent financial adviser near me can help navigate these complex markets and identify potential high-growth sectors.

Fixed Income

Global fixed-income markets experienced a mixed performance in December. The Federal Reserve’s 25bps rate cut brought its total reduction to 1% since September. Similarly, the ECB lowered borrowing costs by 25bps. Despite these measures, returns for US treasuries, German bunds, and UK gilts were negative, at -1.69%, -1.61%, and -2.55%, respectively.

Corporate bond markets also delivered mixed results, with US investment-grade bonds returning -1.78%. For investors aiming to understand the implications of these movements, a certified financial adviser can provide essential guidance on income protection and bond portfolio strategies.

The economic and market developments in December highlight the need for informed financial planning and expert advice. Whether you’re seeking the top financial adviser near me for help with pensions, investment protection, or market insights, working with a trusted and independent financial adviser ensures access to comprehensive services tailored to your financial goals. Founded in 2017, Fintuity has fast become one of the only digital Independent Financial Advisers (IFA) in the United Kingdom.  Fintuity offers a wide range of financial advisory services including pensions, protection, investments and mortgage advice. The key difference is that as an exclusively digital service, we can offer significant savings and a service that is direct to you and on demand.