Global stock markets rallied in November, adding further to their return in what shapes to be another successful year for equity investors – especially in the United States. The index MSCI All-Country World Equity went up 3,6% for the month (in USD) mainly driven by the stock market rally in the US, following Donald Trump’s victory in the presidential elections. The weight of the US market within the index continues to grow and now comprises almost 74% of the global equities, up from less than 50% ten years ago. The US dollar also strengthened in November and this further improved the returns from American shares for international investors.  After the US election outcome proved to be much more decisive than projected, emerging markets swooned amid worries over future trade tariffs. With the Republican control of Congress, it becomes very likely that Donald Trump will be able to implement his policies of further tax cuts, greater deregulation and expansionary fiscal stance. Long US bond yields moved higher post-election (meaning that their prices fell) as investors anticipated an increase in the government budget deficit. The US Federal Reserve (Fed) reduced interest rates by 25 basis points (bps) at the beginning of November and indicated a more gradual path to future rate cuts, as the US economy demonstrated stronger-than-expected growth and robust labor market. Aside from the very positive reaction of US equities to Trump’s victory, the election results were met with some anxiety in other regions – emerging markets underperformed developed markets by a wide margin for the month. Chinese share prices fell primarily due to concerns about a future trade conflict, and the realization that the announced government support measures would not be sufficient to overcome the domestic real estate and consumer confidence crises. Japanese stocks also fell, despite the new government proposal for a stimulus package to boost growth, while (contrary to the rest of the developed world) interest rates continue to push higher. European markets were relatively flat in November due largely to US dollar strength and a rebound in inflation. However, Germany and the United Kingdom both finished in positive territory for the month, as lower-than-US valuations and declining interest rates propped up these market. Gold and oil prices both declined during the month – this was gold’s first monthly decline in 2024. Global bond markets ended the month positively, despite volatility early in the month related to the US elections. Bond returns in Europe were better than in the US, as concerns that Trump’s policy proposals could rekindle inflation reduced US rate cut expectations to only three cuts by the end of 2025. Actually, currency movements in November were the largest contributor to returns for global bonds – reducing performance in USD terms and enhancing returns for international investors. The Barclays Global Aggregate bond index returned over 1% (in USD) for the month.
US equities enjoyed strong gains in November and significantly outperformed other regions. Donald Trump came out as the definite winner in the US Presidential election, coupled with a “red sweep” victory, as Republicans won a majority in both houses of Congress. The prospect of policies implementation that would spur economic growth, lower taxes and cut regulation boosted equities. The biggest winners were small and mid-cap companies, but even large-cap market indices recorded astonishing results for the month: the industrial Dow Jones returned 7,6%, and the broad S&P500 – 5,7%. With the appreciation of the US dollar against other currencies, the return of S&P500 for euro-based investors surpassed 8,8% in November! In addition to the election, positive macro data also fueled the equity rally. Retail sales in October beat expectations, and the composite Purchasing Managers’ Index (PMI) rose to 55.3 (any reading above 50 indicates an expansion). One piece of bad news was the nonfarm payrolls report for October – the economy added meager 12 000 jobs, but the data was distorted by the effects of two hurricanes and the workers strike at Boeing. The Fed lowered, as expected, interest rates by 25 bps at its November meeting, commenting that inflation was still “somewhat elevated”. Indeed, US inflation (as measured by the Consumer Price Index, CPI) inched up to 2.6% in October (from 2.4% previously). The prospects of de-regulation lifted US Financials and the Energy sectors, while Industrials were thought to be some of the main beneficiaries from protectionist trade policy and corporate tax cuts. Thus, for the month the best performing sectors included Financials (banks) and Consumer Discretionary (some carmakers and retailers). Among the weakest performers were Healthcare (targeted by Trump) and Materials. The fixed income markets were also buoyed by Donald Trump’s victory, albeit only slightly. Investors were concerned that his policies could raise inflationary pressures, and thus force the Fed to keep interest rates higher for longer. The benchmark 10-year Treasury yield ended the month at 4.17%, a monthly drop of 11 bps (bond prices and yields move in opposite directions). 
Stocks in Europe had a relatively flat month in November – the broad pan-European equity index Stoxx600 added less than 1% in local currency (EUR). UK equities in particular had a good month (+2.2% of FTSE100), supported by the strong performance of Financials. Excluding the UK, European equities on aggregate fell marginally due to a mix of concerns over potential tariffs from the US and earnings warnings from the automotive and consumer goods sectors (because of sagging demand from China). Eurozone inflation ticked up to 2.3% in November 2024 (from 2.0% in October) and remains close to European Central Bank’s (ECB)’s target. So, at its December meeting ECB is still expected to pursue its monetary policy easing, given the continent’s economic weakness – the bank signaled that inflation was no longer a priority and that achieving 2% growth was now the main focus. Indeed, economic data from the Еurozone continued to point to weakness. The composite PMI fell to a 10-month low of 48.1, with both the services and manufacturing sectors showing contraction. In the UK also there was a slowing down of the services sector, with UK PMI for services falling to its lowest value in over a year – although at 50.8 it is still in expansionary territory. The Bank of England cut its rate by a further 25 bps in November, while UK stock rose over the month. With their undervaluation of up to 50% compared to the US, the UK equity markets have been attracting attention and bubbling with activity recently – there were four takeover deals announced in the final week of November. Overall for the continent, Information technology and Communication services sectors continued to be among the top gainers while Materials and Consumer staples saw some of the sharpest declines. With inflation rising and investors still expecting ECB to lower rates in December, European government bonds outperformed their global peers, rising 2,3% on aggregate in local currency terms. Bonds from Europe’s periphery outperformed, because the collapse of the German and French governments added to the political uncertainty in core Europe – however, as investors perceived greater risk in French debt (due to budget concerns), the spread of French government bonds over German Bunds reached its widest level in 12 years.
November was a negative month for the Bulgarian Stock Exchange. The losses of the Bulgarian indices were about 1% – the flagship SOFIX lost nearly 0.3%, while the index of small companies, beamX, dropped by 1.4%. During the month, the BSE held the closing ceremony of the fourth edition of the beamUp Lab programme for the development of small and innovative enterprises. Another initiative with BSE's partnership was the INVESTOR FINANCE FORUM 2024, where BSE highlighted the merits of its two most attractive segments – the beam market, for small and medium-sized enterprises, and the EuroBridge segment, in partnership with Deutsche Boerse, targeting the largest companies in the country interested in dual listing on the regulated markets in Bulgaria and Germany. In terms of return for the month, the best performing company was the energy holding Petrol AD, which chalked up an increase of more than 20%, while the biggest loser was the paultry producer Gradus AD, whose share price fell by over 12%.

Source: Bloomberg.