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

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    Outlook

    Continued global economic expansion, with world GDP growing 2.5%–3.0% in 2017

    Implications

    Adopt a cautious approach, prioritizing quality and liquidity and avoiding positions that rely on central bank support

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  • U.S.

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    Outlook

    Growth returning to 2.0%–2.5% range, helped by labor market gains and robust consumer spending

    Implications

    Avoid the temptation to overreact to short-term fluctuations, focus on long-term objectives

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  • Europe

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    Outlook

    U.K. growth to drop dramatically in the second half of the year, but expect eurozone GDP growth of 1.25%–1.75%

    Implications

    Remain cautious on European assets over the medium term, but watch for selective opportunities during periods of volatility

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  • Emerging Markets

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    Outlook

    Accelerating growth helped by improved external and internal conditions

    Implications

    Valuations and fundamentals are relatively appealing, favor managers who can discern value in highly differentiated space

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Financial Markets

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

  • Fixed Income

    Outlook

    Bouts of market volatility will create opportunities to add alpha

    Implications

    Understand that the index risk/reward profile has shifted, leaving longer duration, lower yield and increased credit exposure

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  • Equities

    Outlook

    Expect continued outperformance of value stocks

    Implications

    Reduce interest rate risk concentrated in defensive sectors, consider allocation to value stocks

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  • Credit

    Outlook

    Continue to see opportunities in high quality U.S. credit

    Implications

    Consider stepping out the risk spectrum for additional yield potential compared to sovereigns

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  • Municipals

    Outlook

    Potential for attractive yields on a tax-equivalent basis

    Implications

    Consider municipal allocation for a potential source of income and as a timely strategy given concerns of volatility and rising rates

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