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Putting Markets in Perspective


A relatively benign outlook for global growth, but significant risks lurk.

Economy

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

  • Global

    Outlook

    Low and lackluster growth leaves the global economy more vulnerable to growing risks.

    Implications

    A more fragile global economy suggests diversification and resiliency matter more for investors, making it important to understand the idiosyncratic risks across regions and securities.

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  • U.S.

    Outlook

    The U.S. expansion is now the longest on record, and we expect growth to continue.

    Implications

    Markets will likely experience bouts of volatility, so consider partnering with an active manager that seeks stability and aims to provide consistent alpha.

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  • Europe

    Outlook

    Rising populism and high trade sensitivity point to increasing fragility in the eurozone.

    Implications

    Exercise caution on eurozone sovereign and credit risk as well as peripheral risk, given the reliance on ECB support.

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  • Emerging Markets

    Outlook

    Internal factors in emerging markets (EM) look favorable for the foreseeable future.

    Implications

    Consider EM as a strategic part of your asset allocation. Higher yields coupled with the potential for more stability make EM a compelling opportunity in the years ahead.

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Financial Markets

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

  • Fixed Income

    Outlook

    High-quality duration exposure may provide diversification and capital appreciation.

    Implications

    Fixed income investments may help provide portfolio stability in the event of increased volatility or a turn in the economic cycle.

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  • Equities

    Outlook

    Traditional active equity strategies may be structurally challenged.

    Implications

    Seek to improve equity allocations with more structural and diversifying sources of excess return potential.

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  • Short-term

    Outlook

    Looking for a place to wait? Short-term positions could be it.

    Implications

    Short-term strategies support more strategic positioning, helping investors preserve capital and diversify across flexible and defensive allocations.

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  • Credit

    Outlook

    While leverage in the credit sector has increased, pockets of opportunity remain.

    Implications

    Consider avoiding passive strategies that are biased towards industries with higher leverage and actively seeking out fundamentally stronger bonds, particularly in the housing sector.

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