The DFA Quarterly Market Review for Q4 2024 provides an analysis of global capital market performance and significant events during the quarter. Below is a summarized overview:
Market Summary:
- Global equities were mixed, with U.S. stocks outperforming international and emerging markets.
- Bonds saw rising interest rates, leading to mixed returns across segments.
- Commodities faced a slight decline (-0.45%), with notable performance variations among individual commodities (e.g., Coffee +18.51%, Sugar -14.29%).
Regional Performance:
- U.S. Stocks: Posted positive quarterly returns, with growth outperforming value, and large caps outpacing small caps.
- International Developed Markets: Negative returns, underperforming U.S. equities but ahead of emerging markets.
- Emerging Markets: Experienced the largest declines among equity segments.
Sector and Asset Class Insights:
- Real Estate Investment Trusts (REITs): U.S. REITs (-5.93%) outperformed global counterparts (-15.37%).
- Fixed Income: Rising yields caused negative total returns in many bond segments, with long-term bonds impacted more significantly.
- Commodities: Varied performance, with energy and agricultural commodities leading gains.
Consumer Sentiment Analysis:
- The report explores the University of Michigan’s Consumer Sentiment Index, noting its weak predictive power for equity returns despite a below-average sentiment level of 70.1.
Macro and Notable Events:
- Key headlines included economic developments such as Fed rate cuts, inflation dynamics, geopolitical events, and the performance of cryptocurrencies like Bitcoin reaching $100,000.
Yield Trends:
- Across global markets, yield curves generally shifted higher, reflecting a tightening monetary policy environment in various regions.