3 things we (and the markets) are grateful for this season

2024 has been a year for the books. As we close in on its final weeks, your J.P. Morgan team thought it would be timely to practice some Thanksgiving gratitude and reflect upon the past 11 months in the markets.

So before we get to the celebrations and, most importantly, the food, let’s dig into the three things we (and the markets) are grateful for this holiday season. 

3 things we (and the markets) are grateful for this season

1. Answers to some of 2024’s biggest questions. While navigating uncertainty comes with the territory of being an investor, we acknowledge that both embracing it and forging ahead can be a tall order. Luckily, we are heading into year-end with some of 2024’s biggest questions already answered. We think this is definitely something to be grateful for: 

• Could the Federal Reserve achieve a soft landing? Concerns about “too little, too late” swirled this summer as investors worried that labor market heartburn was a result of too aggressive tightening from the Fed. At the end of the day, it appears that despite some turbulence on the way, a soft landing may soon be a reality for the Fed. The core measure of PCE inflation, which excludes food and energy, has fallen by three percentage points since its peak in 2022. This is quite the feat: Outside of wartime, the United States has never seen such a significant decline in inflation occur without a recession. This has so far all taken place without cracking the labor market. While there is work to be done as policy rates continue to normalize, the direction of travel appears to be positive.
• Were global central banks actually ready to cut policy rates? Central bankers across the globe spent much of the past two years running historic tightening campaigns against excessively high inflation. This year was all about determining if they had in fact succeeded at their job (with added bonus points for doing so without causing cracks in the broad economy). Fast forward to today, inflation across the globe has fallen meaningfully toward policy targets. This gave the majority of policymakers the go-ahead to make the long-awaited pivot to ease. Of the 37 global central banks we track, 27 are cutting policy rates, including every major central bank besides Japan. We think this gradual and coordinated global effort is set to continue and will ultimately drive growth forward from here. 

3. Over 50 all-time highs for the S&P 500. The S&P 500 has had a stellar year so far, up over 25% despite election jitters, inflation uncertainty, geopolitical tensions and elevated rates. After gaining 24% in 2023, the index is on pace for the first back-to-back years of 20%+ gains since the late 1990s. The good news is that we think the momentum can continue for a couple of key reasons: 

• Earnings should continue to be supportive. This year, companies were able to produce profits in the face of historically restrictive rates. Looking ahead to next year, every sector in the S&P 500 is expected to post positive earnings growth. This has not happened since 2018, and lower rates are the cherry on top.
• History looks to be on our side when it comes to the bull market. The median bull market total return is 110%. The current bull market total return is only 62% as of the end of October. In other words, if this run is merely in line with history, there looks to be upside from here. 

We know there are a lot of reasons beyond what we mentioned to be thankful for this Thanksgiving. That said, we are particularly optimistic about the opportunity that may lie ahead. As outlined in our 2025 Outlook, we think markets are well positioned to build on 2024’s strength in years to come.

Above all, though, we’re grateful for the trust you place in all of us at J.P. Morgan, and for following markets along with us throughout the year by reading Top Market Takeaways.

Cheers, and a Happy Thanksgiving to you and yours.

All market and economic data as of November 2024 and sourced from Bloomberg Finance L.P. and FactSet unless otherwise stated.

We believe the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice.

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