Highlights
- Growth Outperforms Value
- Yield Curve Steepening
US Markets
Global markets delivered impressive results in 2024, extending the positive trajectory from the prior year. Despite challenges including major global elections, persistent geopolitical tensions, concerns over market concentration, and elevated valuations, investors benefited from strong gains across key indices. In the U.S., growth stocks rebounded in the fourth quarter, following a softer third quarter. Across large, mid, and small caps, growth stocks outperformed their value counterparts, with mid-cap growth leading the way during Q4. Meanwhile, value stocks experienced declines across all market-cap categories during the same period. For the full year, large-cap growth solidified its position as the top-performing style, maintaining its leadership from previous years. However, the large-cap segment as a whole demonstrated resilience, with large-cap value and blend also outperforming their mid- and small-cap peers, highlighting the strength of larger companies in 2024.
US Economy
In 2024, U.S. economic performance largely diverged from other major regions, maintaining its resilience despite global uncertainties. While concerns surfaced mid-year, U.S. economic exceptionalism remained robust. For the first three quarters, GDP growth averaged 2.6% on a quarter-over-quarter annualized basis. Despite this strong growth, recent labor market data indicates a subtle softening of employment trends, which had been developing gradually. Real disposable income growth has outpaced spending growth over the past year, supporting real Personal Consumption Expenditures (PCE) and bolstering overall economic activity. However, signs of deceleration in disposable income growth have emerged more recently. This is not unusual at this stage of the economic cycle, especially as job growth begins to slow.
As we look ahead, it will be crucial to closely monitor these developments, as they will play a key role in determining the sustainability of consumer-driven growth and broader economic momentum.
Global Markets
The economic landscape in Europe showed notable weakness throughout 2024, with the manufacturing sector experiencing the most significant strain. A confluence of high energy costs, restrictive regulatory environments, diminished export demand, and competition from subsidized Chinese industries weighed heavily on European businesses. Additionally, political instability in key countries such as France and Germany further deepened economic challenges. Fiscal pressures, compounded by the rise of populist movements, led to a fracture in political consensus, contributing to increased economic uncertainty. As a result, European equities underperformed relative to other regions. China faced ongoing economic challenges in 2024, with weak consumer confidence and a continuing decline in property prices. Initial policy responses failed to generate investor enthusiasm, but more coordinated policy announcements in September helped restore optimism. Expectations for a significant fiscal stimulus in 2025 fueled a recovery in Chinese equities, which delivered a strong return of 17.71% for the year1.
Fixed Income Markets
In the fourth quarter of 2024, U.S. government bond yields saw a significant rise, driven by economic resilience and persistent inflationary pressures, which had a direct impact on fixed income prices. Notably, both ends of the yield curve experienced substantial movement. On the short end, yields declined in response to the Federal Reserve's anticipated interest rate cuts, which amounted to an additional 50 basis points in Q4 and a total reduction of 100 basis points since September. However, an unusual trend emerged in the long end of the curve, as the 10-year Treasury yield increased by 95 basis points since the Fed's rate cuts began. This steepening of the yield curve is atypical during a rate-cutting cycle and suggests that investors are revising their expectations for the economy. Specifically, they are anticipating stronger growth, higher inflation, and fewer rate cuts than previously expected. This shift reflects a broader change in market sentiment regarding the future economic environment.
Mike has been in the wealth management industry for 10 years, beginning his career at BNY Mellon’s Silicon Valley office. There, he learned the intricacies of wealth management and discovered his passion for helping families achieve their financial goals. He later became a Portfolio Manager at an ultra-high net worth RIA in Boston, where he honed his skills in developing custom investment strategies for clients. Inspired by Savvy’s mission to bring a tech-focused energy to the wealth management industry, Mike joined the firm in July 2022 to drive the launch and continued evolution of their advisory capabilities. At Savvy, Mike has played a key role in developing, launching, and managing the in-house investment solution, Savvy Wealth Investment Management (“SWIM”). He also leads Savvy’s Client Experience Team, partnering closely with associates and advisors and aimed at producing best-in-class services for their clients. Mike is a graduate of Northeastern University and holds his Certified Financial Planner™ (CFP®) designation. He resides in New York with his wife, Alex, and their golden retriever, Bondi.
David Gao is an investment professional at Savvy with deep expertise in portfolio management and trading strategies. He graduated with honors from the University of Utah’s David Eccles School of Business, earning dual degrees in Finance and Economics. Before joining Savvy Wealth, David led trading operations exceeding $1 billion at Campbell Wealth Management, where he also designed and implemented an options covered call strategy. At United Capital Family Office, he played a key role in portfolio allocation, leveraging proprietary algorithms and advanced risk management techniques. He began his career at Goldman Sachs, where he built a strong foundation in investment research and analytics.
Sources:
1.https://www.reuters.com/markets/asia/chinas-economic-stimulus-measures-since-september-2025-01-08/
Material prepared herein has been created for informational purposes only and should not be considered investment advice or a recommendation. Information was obtained from sources believed to be reliable but was not verified for accuracy.
Savvy Wealth Inc. is a technology company. Savvy Advisors, Inc. is an SEC registered investment advisor. For purposes of this article, Savvy Wealth and Savvy Advisors together are referred to as “Savvy”. All advisory services are offered through Savvy Advisors, while technology is offered through Savvy Wealth. The views and opinions expressed herein are those of the speakers and authors, and do not necessarily reflect the views or positions of Savvy Advisors.
