Stock Markets in 2024: The United States Leads, Paris Lags Behind
The year 2024 saw spectacular performance in global financial markets, but not all regions benefited from this momentum.
The United States Leads the Way Thanks to Tech and a Resilient Economy
Wall Street has solidified its status as a global leader. Driven by a robust economy (3% growth) and a booming tech sector, the S&P 500 surged 25%. The “Magnificent Seven” (Apple, Microsoft, Google, Amazon, Nvidia, Meta, Tesla) saw their market capitalization reach $12 trillion, fueled by enthusiasm for artificial intelligence (AI). This momentum also benefited European investors, bolstered by a rise in the dollar (+6% against the euro).
Donald Trump's election in November took the markets by surprise, but his promises of tax cuts and deregulation reassured investors. However, the structural challenges facing U.S. companies could slow this momentum, despite an 11% increase in earnings projected for 2025.
A Setback for the CAC 40
Paris is the big loser of the year, with the CAC 40 falling 2.15%. This decline can be attributed to:
• Political crisis: The dissolution of the National Assembly in June shook investor confidence.
• Economic difficulties: The luxury goods sector, a mainstay of the CAC 40, suffered from the slowdown in China, leading to significant declines for companies such as Kering (-40%) and LVMH (-13%).
• Structural challenges: With public debt reaching 113.7% of GDP, low business confidence, and a series of layoffs, France has struggled to attract foreign capital.
An Asian Rebound and Global Opportunities
The Japanese stock market had an exceptional year, with the Nikkei index rising 20%, driven by a weaker yen and robust exports. In China, despite economic headwinds, the Shanghai Composite rose 14%.
2024: Bitcoin and Gold in the Spotlight
Bitcoin reached a historic milestone, surpassing $100,000 (+130%), thanks to the boom in ETFs and support from Donald Trump. Meanwhile, gold has regained its status as a safe-haven asset, rising 26%, buoyed by geopolitical tensions and massive purchases by central banks.
Outlook for 2025
The United States is expected to maintain its leadership thanks to a dynamic economy and solid earnings, although high stock valuations raise questions. In Europe, the outlook remains more subdued, weighed down by weak growth and structural challenges. Japan could continue on its current trajectory, while cryptocurrencies could stabilize thanks to their growing institutional adoption.
(Source: Cercle de l’Épargne / Analysis by Philippe Crevel, Director of the Cercle de l’Épargne)
