The Australian share market fell (-3.1%) for the last month of the year as investors became cautious in the aftermath of the US election.
The best performing sectors were Consumer Staples (+0.7%), and Utilities (+0.4%). In contrast, Property (-5.8%), Materials (-4.5%) and Financials (-4.1%) all fell heavily.
The world share index fell (-1.9%) for December. The US market was down (-2.0%), the UK (-1.3%), Germany (-1.6%), France (-1.5%) and India (-1.4%). Japan (+4.5%) and China (+0.9%) both managed a positive end to the year.
National house prices fell (-0.1%), marking the first fall in 22 months. Sydney was down (-0.7%) and Melbourne (-0.6%). Perth and Adelaide continued to rise with both up (+0.6%).
The Reserve Bank of Australia (RBA) kept its cash rate at 4.35% during its final meeting of 2024 – the ninth consecutive meeting without any change. The unemployment rate climbed slightly to 4.0% and the Australian dollar fell to US$0.619.
The price of Iron Ore was down (-4.8%), Gold (-0.7%), and Silver (-5.6%) while Oil went up (+4.4%) and Bitcoin had a modest increase of (+2.1%) for the month.
2024
Australian shares produced a return of (+11.4%) for the calendar year. The average return over the past 10 years has been (+8.8%), with this year ranking the 6th best of the past 10. Over the past 40 years the average return has been (+10.6%), so overall 2024 was a pretty good year.
Technology was the best place to invest, up (+49.5%) for the year. The banking sector climbed (+31.0%) for its best year since the post Global Financial Crisis bounce back, with the CBA share price up (+37.1%). At the other end of the scale the Resources sector finished the year down (-18.8%). Fortescue (-37.1%) and BHP (-21.5%) were the 2 worst performing stocks of the top 50 on the Australian share market.
Global share markets had another strong year returning (+20.6%). If you take into account the falling Australian dollar the return was a very strong (+29.3%). The US was up (+25.5%), and the US technology index (+30.7%). Things were slower in Europe with the top 50 European companies delivering (+11.9%) for the year. The UK returned (+9.7%), Japan (+21.3%), and China (+16.1%).
Last year was the first year that US shares have returned more than (+20.0%) for two consecutive years since 1999. In 2000 and 2001 the US market then produced 2 negative years of returns so let’s hope that doesn’t happen this time around.
If you are wondering who benefited most from the big year in share markets – 2024 saw the worlds 500 richest people reach a combined wealth milestone of US$10 trillion. None benefited more than Elon Musk who finished the year with an estimated wealth of US$442 billion which makes him US$237 billion richer than the next richest person on the planet – Jeff Bezos.
National house prices finished up (+4.9%) for the year, but if you live in Melbourne prices have actually fallen (-3.0%). Perth won the race as the best capital city for house price accumulation in 2024, with prices up (+19.1%). Nationally, rents increased (+4.8%) over the year.
Interest rates remained unchanged during 2024 at 4.35%, and the unemployment rate also remained steady. The Australian dollar fell (-9.0%), which was its worst fall in 6 years. It’s no coincidence that the $AUD peaked at US$0.69 in September which was the same time support for the Democrats in the US election also peaked. By the end of the year it had fallen to US$0.615 which is a 2 year low. It’s worth remembering that the dollar fell to US$0.57 during the global pandemic and from US$0.98 to US$0.60 in just 3 months during 2008.
The price of Iron Ore fell (-29.8%) and Oil (-5.4%) over 2024. Gold (+27.0%) and Bitcoin (+123.3%) both had good years.
After all that – the 2 most important figures perhaps relate to super fund returns. According to research firm Chant West, the average return for a Balanced Super Fund for 2024 was (+8.7%). For Growth style investors the superannuation benchmark was (+11.4%).
