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Equities

Equity markets take their cue from central banks

Saira Malik
Chief Investment Officer
Office chairs and a conference table

Global equities delivered strong fourth-quarter returns, as rallies in November and December more than offset October’s decline. U.S. equity benchmarks led the way, with most posting double-digit gains, joined by non-U.S. developed markets, which outperformed their emerging-market (EM) counterparts and all-country world indexes. Although investors initially fretted over “higher-for-longer” interest rates, cooling inflation boosted market optimism that central bank tightening had peaked and lower policy rates were forthcoming. The Federal Reserve reinforced this view in December by signaling an end to its tightening cycle and projecting 75 basis points of rate cuts in 2024. Outside the U.S., central banks generally paused but did not telegraph easier policy.

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Endnotes

Index Performance: FactSet; European Corporate Earnings: I/B/E/S; U.S. Corporate Earnings: Standard & Poor’s; Employment: RBC Global Asset Management; Russell Indexes: FactSet, Russell Investments.

The views and opinions expressed are for informational and educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market, economic or other conditions, legal and regulatory developments, additional risks and uncertainties and may not come to pass. This report contains no investment recommendations and should not be construed as specific tax, legal, financial planning or investment advice. This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of market returns, and proposed or expected portfolio composition. Any changes to assumptions that may have been made in preparing this material could have a material impact on the information presented herein by way of example. This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor's objectives and circumstances and in consultation with their advisors. 

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