Overall, a good year on the stock market
Macroeconomic environment
2024 proved to be another eventful year for the financial markets. There was no deep recession in either the USA or the eurozone despite a moderate slowdown in global economic growth. The central banks continued to pursue an active monetary policy, with interest rates being lowered slightly in several regions. Inflation in the eurozone was reduced to 2.9 per cent, down from 5.4 per cent in the previous year.
A similar trend emerged in the USA, prompting the Fed to adjust interest rates multiple times. The USA’s economic strength was reflected in GDP growth of around 2.8 per cent, while the eurozone recorded weaker growth of 0.8 per cent.
Inflation in Germany averaged 2.2 per cent in 2024 compared to 5.9 per cent in 2023. Inflation in Austria fell from 7.8 per cent in 2023 to 2.9 per cent in 2024. Economic output fell slightly again in 2024 in both Germany and Austria.
Shares: new highs
The global equity markets achieved some remarkable successes in 2024. The S&P 500 recorded growth of 23 per cent, driven by technology stocks, particularly companies in the field of artificial intelligence. The DAX, which recorded an overall increase of 18.8 per cent, exceeded the 20,000 point mark for the first time and reached its previous all-time high of 20,523 points on 13 December 2024. The Euro STOXX 50 also rose by 8 per cent. However, the markets were characterised by strong volatility over the course of the year: Following a strong start to the year, uncertainty about further interest rate hikes led to a period of consolidation. A rally began in November, fuelled by hopes of a more stable interest rate environment.
Bonds: attractive returns
The bond markets regained their significance in 2024, especially for investors seeking a diversified portfolio. Yields on ten-year government bonds in the USA temporarily exceeded the 5 per cent mark before levelling off at around 4.5 per cent. European bonds remained below this threshold, but also offered attractive yields, particularly in the core markets. Corporate bonds also recorded increased demand, although risk premiums remained stable.
Austrian capital market: development and dynamics
The Austrian stock market also recorded solid growth in 2024. The ATX leading index rose by 6.6 per cent, benefiting from a stabilisation of the economy and higher demand for cyclical stocks. Despite the moderate growth compared to other European indices, the ATX offered attractive dividend yields of 4.2 per cent on average.
The bond markets in Austria followed the European trend. Yields on ten-year Austrian government bonds peaked at 3.8 per cent over the course of the year before levelling off at around 3.5 per cent. Corporate bonds remain an interesting investment option, particularly in the area of sustainable investments.
Cautiously optimistic outlook
The signs for 2025 point to growth, with the global economy beginning to stabilise and with monetary policy loosening. Nevertheless, geopolitical risks and uncertainties regarding the long-term development of inflation remain key challenges.
