Key Charts That Defined Markets & the Economy in 2024

A lot can happen in a year. In 2024, inflation remained a hot topic as the Federal Reserve cautiously ended the longest pause after a rate hiking cycle in the Fed's history by cutting rates in September, the economy proved resilient, and equities delivered a strong performance.

Given how these moments (and others) shaped the current environment, we believe that the margin for error in financial markets is slim in 2025. With equities largely priced to perfection, discretion will be of paramount importance in pursuing opportunities, but also managing risk.

Before we put 2024 in the rearview mirror, let’s look back at 12 charts—one for each month—that defined 2024.

Inflation has been a dominant factor in global markets for several years now. Its rise brought about an aggressive hiking cycle and its trajectory from here will help determine the scale of the easing cycle we see both domestically and abroad.

Unemployment has been ticking higher in the US. So much so, that in the back half of the year, the Federal Reserve pivoted toward focusing on the employment side of its dual mandate. 

While the rise in the unemployment rate is concerning, the message from initial claims continues to be far more sanguine. 

Despite inflation still running above its target level, softness in the labor market and a downward trajectory in inflation gave the Federal Reserve enough reason and confidence to cut its policy rate after the longest pause in the institution’s history. 

As financial markets digested incoming developments ranging from inflation to growth to fiscal policy, Treasury yields reflected investors’ uncertainties. 

Traditionally thought of as one of the strongest indicators of impending economic weakness, the 10-2 yield curve un-inverted this year for the first time since 2022. 

While not quite a wrecking ball, the US dollar did strengthen throughout the course of the year, providing a headwind to foreign equity returns and commodities. 

Despite the backup in yields and the strength of the dollar, gold delivered strong returns. 

US equity markets continued their strong run of outperformance versus the rest of the world. 

The S&P 500 crossed 6,000 for the first time in history as it continued to press higher throughout much of the year, consistently making new highs. 

Valuations look stretched, and counting on multiple expansion from these levels may well prove to be problematic. 

On a cyclically adjusted basis, valuations have reached levels that typically see lower-than-normal long-term forward returns. 

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The MSCI ACWI ex USA Index (ACWIxUS) is designed to measure large and mid-cap representation across 22 of 23 Developed Markets countries (excluding the U.S.) and 24 Emerging Markets countries. The Index returns do not reflect any fees or expenses. The Index is denominated in U.S. dollars. Index returns are net of withholding taxes. They assume daily reinvestment of net dividends thus accounting for any applicable dividend taxation. Index returns provided by Bloomberg. Index data referenced herein is the property of MSCI, its affiliates ("MSCI") and/or its third party suppliers and has been licensed for use by Manning & Napier. MSCI and its third party suppliers accept no liability in connection with its use. Data provided is not a representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none of these parties shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. For additional disclosure information, please see: https://go.manning-napier.com/benchmark-provisions.

This material contains the opinions of Manning & Napier Advisors, LLC, which are subject to change based on evolving market and economic conditions. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.