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The Magnificent Seven (Alphabet (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), and Tesla (NASDAQ:TSLA), which rose by an average 111 per cent over calendar 2023, continued their strong upward trajectory, increasing a further 37 per cent, on average, over the six months to June 2024. This helped drag up the Nasdaq, which jumped 18.1 per cent and 28.5 per cent for the 6 and 12 months to June 2024, respectively. The S&P 500 also did very well, up 22.7 per cent for the year and up 14.5 per cent for the six months to June 2024.  

The downward trajectory of the U.S. annual rate of inflation, which slowed to 3.1 per cent in November 2023, stalled and this delayed any easing of the U.S. Federal Reserve (Fed) funds rate to later in 2024. The anticipated decline in the inflationary expectations has also stalled in many other economies. Only the Canadian central bank and the European central banks commenced cutting their official cash rate, in June 2024, by 0.25 per cent to 4.75 per cent and 4.25 per cent, respectively. 

Other stock market indexes which performed well included the Indian Sensex Index (+22.6 per cent for the year and +9.4 per cent for the six months), the Japanese Nikkei 225 Index (+19.2 per cent for the year and +18.2 per cent for the six months) and the German DAX 30 Index (+12.9 per cent for the year and +8.8 per cent for the six months). Over fiscal 2024, the Australian All Ordinaries Index put on a solid 8.4 per cent, excluding dividends. However, the performance over the six months to June 2024 was subdued at +2.4 per cent. The Chinese, Hong Kong, French and New Zealand markets disappointed with relatively tough economic conditions.  

After breaching 5.0 per cent in October 2023, U.S. ten-year bond yields declined to 4.39 per cent by the end of June 2024. With expectations of the U.S government deficit nearing 7 per cent to gross domestic product (GDP) for the year to September 2024, the 23rd consecutive budget deficit, and the U.S. government debt to GDP ratio heading in a steady upward direction, it is unsurprising Gold is doing well. Many countries ten-year government bonds sold off by around 0.5 per cent in the six months to June 2024.  

For the twelve months and six months to June, respectively, Gold rallied 21.8 per cent and 12.8 per cent to U.S.$2,337/oz. and with the flat Australian Dollar, Aussie Gold producers are enjoying the $3,500/oz Gold price. With the Chinese residential property sector crisis, including many property developers entering administration, it is unsurprising to see iron-ore declining by 22.4 per cent in the six months to June to U.S.$105.60/tonne. Without the additional expenditure from the Chinese infrastructure sector it is likely the iron-ore price would come under further pressure, and fiscal 2025 forecast from the Australian Treasury is pessimistic.  

On the currency front, the Australian dollar was relatively flat against the U.S. dollar, after troughing at U.S.$0.63 in mid-October, which coincided with the peak in U.S. ten-year bonds. The very weak Japanese Yen saw the Australian dollar at a ten year high of 107, +20 per cent over the year. However, the Australian dollar was weaker against the British Pound (-7.3 per cent) and relatively flat against the Euro.  

As we head into fiscal 2025, the question on everyone’s lips is whether the war on inflation has been won. Central banks do not want to ease too quickly and then watch inflation bounce. Whilst trying to avoid a pickup in unemployment and a possible recession, there has been little progress on the last mile of declining inflationary expectations. Central Banks cannot control food or energy prices, and both have potential upside from historically low inventory levels and increasingly volatile weather patterns. 

The 6 months and 12 months to 30 June 2024 

  30-Jun 31-Dec 21-Jun 6 months to 12 months to
  2023 2023 2024 30-Jun-24 30-Jun-24
        % Change % Change
All Ordinaries 7401.5 7829.5 8013.8 2.4% 8.3%
S&P 500 4450.4 4769.8 5460.5 14.5% 22.7%
Nasdaq 13787.9 15011.4 17723.8 18.1% 28.5%
Nikkei 225 33189.0 33464.3 39557.5 18.2% 19.2%
FTSE 100 7531.5 7733.2 8164.1 5.6% 8.4%
Dax 30 16147.9 16751.6 18234.1 8.8% 12.9%
CAC 40 7400.0 7543.2 7479.4 -0.8% 1.1%
Shanghai Composite 3202.1 2974.9 2967.4 -0.3% -7.3%
Hang Seng 18939.6 17023.0 17722.3 4.1% -6.4%
Sensex (India) 64446.0 72240.3 79032.7 9.4% 22.6%
NZ50 Gross 11938.4 11770.5 11717.4 -0.5% -1.9%
US 10 Year Bonds 3.84% 3.87% 4.39% 0.52% 0.55%
German 10 Year Bunds 2.39% 2.02% 2.49% 0.47% 0.10%
UK 10 Year Gilts 4.39% 3.56% 4.21% 0.65% -0.18%
Japan 10 Year Bonds 0.39% 0.63% 1.03% 0.40% 0.64%
Australian 10 Year Bonds 4.03% 3.96% 4.35% 0.39% 0.32%
Australian 11am Call 4.10% 4.35% 4.35% 0.00% 0.25%
Gold (US$/oz) 1918.7 2071.8 2336.9 12.8% 21.8%
Oil (US$/bbl) 74.34 77.07 81.46 5.7% 9.6%
Iron-ore (US$/tonne) 110.75 136.16 105.60 -22.4% -4.7%
Copper (US$/lb) 3.76 3.89 4.37 12.3% 16.2%
Wheat (US$/bushel) 6.84 6.28 5.75 -8.4% -15.9%
$US/$A 0.68 0.68 0.67 -1.5% -1.5%
$A/GBP 1.77 1.87 1.90 1.6% 7.3%
$A/EUR 1.57 1.62 1.61 -0.6% 2.5%
Yen/$A 89.30 95.45 107.20 12.3% 20.0%

The Polen Global Growth Fund owns shares in Alphabet, Amazon and Microsoft, This article was prepared 1 July 2024 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade Alphabet, Amazon or Microsoft, you should seek financial advice.     


Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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