Russell Investments Insights

2017 Global Market Outlook—
Q4 Update

The Outlook highlights the most recent economic insights and market expectations from the firm's global team of investment strategists.

 

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Features

Market Insights


Quantitative modeling insights

28/09/2017
The model for U.S. equities versus U.S. fixed income has moved into the positive range, up from neutral in our mid-year report. With low inflation and steady U.S. GDP growth, equities have increased in value. This stronger momentum translated into a greater signal in favour of risk assets, though we remain cautious.
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The eurozone: The euro versus everything else

28/09/2017
From the perspective of financial markets, the third quarter of 2017 is best described as "the euro versus everything else." Tailwinds in the form of continued strong economic growth, favourable politics and robust earnings were neutralised by a single headwind: a rising euro exchange rate. Looking ahead, we expect the balance between these two forces to tilt back in favour of the fundamentals, supporting eurozone assets.
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Executive Summary

28/09/2017
The monetary policy tide is heading out, putting upward pressure on government bond yields. Momentum can drive equity markets higher, but we believe extremely stretched U.S. equity valuation makes the market vulnerable to any unwelcome news.
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Asia-Pacific: Riding the wave of momentum?

28/09/2017
The developed Asia-Pacific economies have been firming, while the developing economies continue to ride the wave of positive momentum. China’s 19th National Congress (due to begin in late October) will be the focus for the region, while geopolitical risks with North Korea will likely remain. Valuations remain slightly expensive, although we note that Japan is looking more attractive than the rest of the region.
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United States: Secondhand growth

28/09/2017
Cyclical strength in Europe and the emerging markets has rippled back into the U.S. market, helping large-cap businesses beat earnings expectations for two consecutive quarters. However, domestic fundamentals still look mediocre.
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Currencies: Euro rally pauses but has legs

28/09/2017
Everyone seems to love the euro, so much so that it may have become a crowded trade. In the near term, too much optimism could dampen the rally. However, the likely tapering of bond purchases by the European Central Bank in 2018 and the revival of centrist governments will support the euro in the medium term.
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Russell Investments Communiqué September 2017

20/09/2017
Our perspectives on current and emerging investment issues.
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Market Overview Q2 2017

21/07/2017
Russell experts continually monitor and review world markets and economies. Here you can find a closer look at the financial markets and the events that have transpired over the last quarter with insight into Russell's view and outlook for the global markets in the future.
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The Trump agenda update: Does it still matter to investors?

29/06/2017
President Trump and the Republicans in Congress have set out to achieve a very aggressive legislative agenda in their first 200 days. These policy initiatives pose an intricate web of positive and negative threads for global investors to grapple with. We’ve written extensively about how difficult it is to get things done in Washington DC. And the Trump Administration has not been immune to these challenges.
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Executive Summary

28/06/2017
We still want to buy dips and sell rallies against the backdrop of an expensive U.S. equity market, a broadly neutral earnings outlook, and sentiment indicators that point to complacency. Europe and, to a lesser extent, Japan and emerging markets (EM) have better cycle support. Government bonds are expensive, but a lack of global inflation pressure should keep yields in a range.
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