Market development – Q3 2024

18.10.2024

Q3 was positive, but also with many bumps along the way and more fluctuations than we have been used to this year. In early August, we saw equity prices fall by 7%-8%. The nervousness emerged after some poor economic indicators and an announcement of interest rate hikes in Japan. This led to a rise in the Japanese yen which hit speculative equity investments. The turmoil in the financial markets did not last long, however, and the equity market quickly regained its positive trend. A key reason was that both the European Central Bank (ECB) and the US Federal Reserve (Fed) signalled interest rate cuts as inflation has now calmed down enough for interest rates to be lowered again. The ECB cut interest rates by 0.25% in September whereas the Fed cut its rates by 0.50%.

Figure 1: Development of equities and bonds