Putting Markets in Perspective


Our latest thinking on global economic drivers and financial markets.

Economy

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

  • Global

    Outlook

    The global expansion should continue with world GDP growth in the 3.0%-3.5% range.

    Implications

    Expect more normal levels of volatility and focus on portfolio flexibility and diversification.

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  • U.S.

    Outlook

    Above-trend growth and higher inflation are likely, with some tail risks.

    Implications

    Focus on portfolio diversification and consider an allocation to inflationhedged assets.

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  • Europe

    Outlook

    Expect continued above-trend growth given its more lagged post-crisis recovery.

    Implications

    Take a cautious approach to interest rate exposure and assets heavily reliant on central bank support in the eurozone.

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  • Emerging Markets

    Outlook

    Positive growth dynamics are backed by healthy fundamentals.

    Implications

    A selective approach to EM asset selection remains critical given current pricing and idiosyncratic risks.

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Financial Markets

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

  • Fixed Income

    Outlook

    Higher yields should mean higher return potential.

    Implications

    Investors are being rewarded to diversify and now may be an attractive entry point for core fixed income.

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  • Equities

    Outlook

    Volatility has returned to normal levels.

    Implications

    Consider an allocation to international and emerging market equities which can provide diversification benefits.

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  • Short-term

    Outlook

    Accessing structural opportunities across the global bond markets can enhance yield potential.

    Implications

    Investors looking to de-risk may benefit by including active shortterm and ultra-short-term strategies.

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  • Credit

    Outlook

    Preferreds look compelling given strong fundamentals and attractive starting valuations.

    Implications

    Consider capital securities issued by financial companies given strong fundamentals of the banking system and compelling valuations.

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