Putting Markets in Perspective


Global growth is still synching lower, but we don’t think a recession is imminent.

Economy

PIMCO’s outlook for major economies over the next six to twelve months

  • Map with UK in blue
  • Global

    Outlook

    The global economy should continue to grow, albeit at a slower pace.

    Implications

    Consider active strategies that can emphasize pockets of value while avoiding sectors that may be over-valued.

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  • UK

    Outlook

    Consumer spending will remain stretched with the broader outlook very uncertain.

    Implications

    Be cautious of UK risk and look to diversify into global bonds for better risk-adjusted return potential.

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  • Europe

    Outlook

    We expect Eurozone growth to pick up to 1.5%– 2.0% but remain cautious due to political event risk.

    Implications

    Even with scaled back expectations of a populist event, investors should approach European investments with caution.

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  • Emerging Markets

    Outlook

    Emerging markets are supported by favorable internal and external factors.

    Implications

    Keeping risks in mind, now may be a good time to reconsider EM allocations and look for opportunities to add diversified positions.

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Financial Markets

PIMCO’s outlook for four key financial markets with implications for investors

  • Fixed Income

    Outlook

    Rising rates may create opportunities to add alpha in fixed income.

    Implications

    Consider a diversified approach and partner with managers who can optimise portfolios to take advantage of market events.

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  • Equities

    Outlook

    Emerging market value stocks remain an inexpensive pocket of global equities.

    Implications

    Revisit EM equity allocations as EM value strategies may offer long-term upside potential.

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  • Credit

    Outlook

    Credit markets will continue to offer alpha opportunities for active managers.

    Implications

    Look for teams with extensive research capabilities to take advantage of these opportunities.

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  • Asset Allocation

    Outlook

    Political events continue to influence the price of volatility at different market levels

    Implications

    Consider strategies with the flexibility to express views using a variety of instruments.

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