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

    Global economic expansion should continue, with world GDP growth in a 2.75%–3.25% range.

    Implications

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

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  • U.S.

    Outlook

    The U.S. economy should remain on solid footing through 2017, with GDP growing 2.0%–2.5%.

    Implications

    With the potential of higher inflation, maintain an allocation to inflation-hedging investments as part of a diversified portfolio.

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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

    Growth is returning to EM economies and we forecast EM GDP growth of 5.0–5.5%.

    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 optimize 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 longterm upside potential.

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  • Mortgages

    Outlook

    Mortgage-related securities continue to be an area where we see value.

    Implications

    Consider adding a mortgage-focused strategy to take advantage of constructive views on the U.S. housing market.

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  • Real Assets

    Outlook

    Longer-term inflationary risks remain, and a positive inflation surprise is likely in the near-term.

    Implications

    Be prepared for inflation surprises by considering an allocation to TIPS or commodities.

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  • Municipals

    Outlook

    Regardless of tax policy uncertainty, municipals should remain attractive for many investors.

    Implications

    With the potential for market volatility ahead, consider actively managed strategies that can adapt to evolving conditions.

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