Musings on Markets · 2025-02-06 · 483d

Global Market Performance and Risk-Free Rate Estimation Across Currencies in 2024

Analysis of 2024 global market performance showing US outperformance and regional divergences, with detailed examination of currency effects and methodology for estimating risk-free rates across different currencies. The author demonstrates how exchange rate movements and inflation differentials impact international investment returns.

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Metrics in this report

Calculated Risk-Free Rate in Brazilian Reals

9.5-9.60%

derived from differential calculation

Example calculation result

Expected Brazilian Real Inflation Rate

7.5%

example assumption

Used in risk-free rate differential calculations

Expected US Inflation Rate

2.5%

example assumption

Used in risk-free rate differential calculations

Global Market Cap Growth

12.17%

aggregate

All publicly traded stocks globally, 2024

Merval Index Return

170+%

nominal local currency

Best performing index subset, 2024

US 10-Year Treasury Bond Rate

4.5%

point-in-time reference

Risk-free rate in US dollars, example calculation

US Dollar Broad Strength

9.03%

annual change

Broad USD index against all currencies, 2024

US Dollar Strength vs Developed Markets

7.66%

annual change

USD index against developed market currencies, 2024

US Dollar Strength vs Emerging Markets

10.31%

annual change

USD index against emerging market currencies, 2024