“It’s tough to make predictions, especially about the future.”
– Yogi Berra
Market commentary
The traditional “Santa Rally” failed to materialize this year as the equity market ran out of steam on the back of hawkish comments out of the US Fed. Elsewhere equity market returns were generally more modest with most delivering 8 to 12%, with all of the NZ50s returns coming in the back half of the year, however it still lags behind its January 2021 all-time high. Nonetheless, global equites closed the year up 19%, extending a remarkable run during which it has posted >16% in six of the past eight years.
US mega-cap tech stocks were once again to the fore, with Palantir (+340%), Nvidia (+171%) and Broadcom (+110%) amongst the top 10 performing stocks on the S&P500. Of note, the rally does appear to be broadening out with analysts expecting 2% of the forecast 9% average earnings growth in 2025 to come from the 10 largest stocks compared to 9% of the 14% growth in 2024.