Global Equity Markets Hit Record Highs Amid Strong Economic Data and Corporate Earnings
In a remarkable show of strength, the world’s equity markets are hitting record highs across major financial hubs like New York, London, and Tokyo. Recent data shows that 14 of the world’s 20 largest stock markets have reached all-time highs, with the MSCI ACWI Index setting another record on Friday.
Driving this surge in market activity are looming interest rate cuts, robust economies, and strong corporate earnings. Analysts point to the $6 trillion sitting in money market funds as a potential driver to keep the rally going, while risks remain scarce.
Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, expressed optimism about the current market conditions, stating, “From a macro perspective, there are no red signals. The cyclical picture is staying strong, and the rally is broadening out.”
Despite a brief pullback in April, global stocks have quickly rebounded, with the S&P 500 maintaining a streak of not seeing a 2% drop in 311 days, the longest since 2017-2018. Even Chinese equities, which struggled earlier this year, are starting to recover.
The S&P 500 alone has set 24 new all-time highs in 2024, fueled by hopes for a soft landing in the economy and enthusiasm for artificial intelligence technology. European equities are also on a record-breaking spree, with positive economic data driving corporate profits and market expectations.
Commodities have played a significant role in lifting stocks, with the UK’s FTSE 100 Index and Canada’s S&P/TSX Composite Index benefiting from soaring commodity prices. Japan’s Nikkei 225 has seen a 16% increase this year, driven by shareholder reforms and a weak yen.
India and Australia have also experienced strong market performance, with the S&P BSE Sensex in India setting records and the S&P/ASX 200 Index in Australia hovering near all-time highs.
Overall, the global equity markets are experiencing a period of unprecedented growth, fueled by strong economic fundamentals and investor optimism. As major financial hubs continue to hit record highs, the outlook for the future remains positive.
