Every year we look back at the trends and events that shaped the investment landscape. Here’s what we saw in 2024.
At this time last year, investors and analysts alike were concerned about the possibility of a recession. And yet, as we end this year, we’re relieved that a recession has not yet materialized, and that it may be avoided altogether. “We’re less concerned about a recession right now,” says Wayne Wachell, Chief Investment Officer at Genus. “What mitigated it was AI and government spending, which kept us afloat. Right now, around the world, we’re on an interest rate easing cycle, which should lead to growth in the coming 12 months.”
In fact, the year was characterized by exceptional growth in the U.S. markets, primarily thanks to the proliferation and demand for Generative AI, as well as a fourth quarter rally driven by the US Presidential election results. “Building a whole infrastructure predicated on the future of AI really carried us over,” Wachell says, before cautioning that a lot of the job growth in 2024 also came from government hiring – “which is not sustainable,” he adds.
The tech sector led the pack, again
With the arms race that is Generative AI, the tech sector’s ‘Magnificent Seven’ companies (Apple, Amazon, Microsoft, Meta, Alphabet, Tesla and Nvidia) were the main drivers of the tech market’s upswing, accounting for more than half of the S&P 500’s 25-percent return last year. But it wasn’t the only sector to do well. “The big winners this year also included communications services, financial services, consumer cyclicals and industrials,” Wachell says.
At the bottom of the pack? Basic materials, energy and health care. “Energy got hit on the new global economic weaknesses, and on China having problems getting ignition in their economy,” Wachell says. “And health care got whacked thanks to issues on the cost side, and then with the announcement of Trump’s appointment of Robert F Kennedy Jr. to lead the Department of Health and Human Services.”
Government spending powered much of the economic upswing
The economic upswing was also powered in part by government spending. And while inflated public budgets helped to prop up the economy, they have also created a bigger problem. “The rate of deficit to GDP is extremely high right now,” Wachell says. “It’s almost 7% in the US, which is usually when you go into a recession, so something has to give.”
That situation is slated to be rectified when Trump takes office and officially launches DOGE – the Department of Government Efficiency, led by Elon Musk and Vivek Ramaswamy. Their intent will be to restructure government processes and cut costs. “If Doge goes heavy and is successful, we can expect that in Canada, in Europe and in the Far East, in terms of as a blueprint for what to do to get government spending under control,” Wachell says.
Geopolitical turmoil increased, but had little impact economically
The year saw further escalation of geopolitical tensions, as global conflicts grew, particularly in the Middle East. But despite recent escalations, the conflicts have had minimal impact on the markets – so far.
“We’re locked in a superpower battle between the Western hegemony and Russia/China,” says Wachell. “Now we’re seeing Syria get involved. The hope is that President Trump can do something to deescalate.”
Growth in responsible investing held steady
The appetite for responsible investing products continued to grow in 2024, driven in large part by the increasing impact of climate change. “2024 was the warmest year on record, as the global average temperature continued to approach the potentially catastrophic 1.5 degrees above pre-industrial levels,” says Stephanie Tsui, Chief Sustainability Officer, Portfolio Manager and Partner at Genus. “The year saw many extreme climate events such as hurricanes, droughts and floods, so it’s not surprising to see environmental factors continue to be among the top considerations for asset owners.”
In Canada, responsible investments now account for 71% of all assets under management – a significant milestone for the industry. “It’s telling us that responsible and sustainable investing are here to stay, and they’re becoming the norm, rather than a niche,” Tsui says.
Institutional impact investing saw an uptick
This year, we also saw more institutional investors looking to align their investments with specific types of impact. Indigenous reconciliation, in particular, attracted numerous clients. “Often they cite compliance with the United Nations Declaration of the Rights of Indigenous Peoples (UNDRIP),” Tsui says. “One of our key clients is even incorporating language around that into their investment policy.”
To this end, our Indigenous Conflict screen became available to all of our clients and enables them to exclude companies from their portfolio that are engaged in conflict with Indigenous communities.
2024’s big investing takeaway
As with every year, there were a few distinct themes that permeated the investing landscape of 2024. But the big story was undoubtedly AI.
“Pay attention to AI,” concludes Wachell. “It’s a massive story.”
Looking for an in-depth review of 2024, and a look at our predictions for 2025? Register now to attend our upcoming webinar on January 23rd. You can join us in person or via livestream.
References:
- Statista. (2024, October 15). U.S. annual corporate profits 2000-2023. https://www.statista.com/statistics/222130/annual-corporate-profits-in-the-us/
Bernstein, D. (2024, August 30). Who is winning the AI arms race? Forbes. https://www.forbes.com/sites/drewbernstein/2024/08/28/who-is-winning-the-ai-arms-race/
Richter, F. (2025, January 2). AI-Powered tech boom fuels 2024 stock market rally. Statista Daily Data. https://www.statista.com/chart/30318/sector-contributions-to-sp500-return/
- Robert F. Kennedy Jr. tapped as Donald Trump’s Health and Human Services nominee. (2024, November 15). CBC. https://www.cbc.ca/news/world/trump-rfk-hhs-nomination-1.7383717
Ahmed, K. (2024, November 21). World’s conflict zones increased by two-thirds in past three years, report reveals. The Guardian. https://www.theguardian.com/global-development/2024/nov/21/world-conflict-zones-increased-by-two-thirds-past-three-years-report-ukraine-myanmar-middle-east-africa
2024 Canadian RI Trends Report – Responsible Investment Association. (2024, November 19). Responsible Investment Association. https://www.riacanada.ca/research/2024-canadian-ri-trends-report/
- United Nations. (2007). United Nations Declaration on the Rights of Indigenous Peoples. https://www.un.org/development/desa/indigenouspeoples/wp-content/uploads/sites/19/2018/11/UNDRIP_E_web.pdf
