Russell Investments Insights

2017 Global Market Outlook

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

 

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Market Insights


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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Quantitative modeling insights: repeat performance

28/06/2017
Our modeling inputs appear stuck in neutral for 2017, offering no reason to change our outlook on equities or recession risk.
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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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The eurozone: Markets are closing the gap

28/06/2017
In the past quarter, eurozone markets started to close the gap between strong fundamentals and weak relative performance. A "good news" show coming from the economy, political developments, earnings growth and monetary policy pushed markets higher. Although this rally has stretched near-term sentiment, we expect the eurozone to continue to do well in the medium term.
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United States: Strike three on inflation?

28/06/2017
The U.S. economy still looks resilient but mediocre. Incoming data during the second quarter proved consistent with our below-consensus growth forecast for 2017. The bigger surprise has come from the sharp slowdown in core inflation. We think this should put a halt to further Fed funds rate hikes this year. The lack of pricing power also poses a medium-term threat to corporate profitability.
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Currencies: European renaissance

28/06/2017
The political risks to the eurozone project are fading after elections in France, Austria and the Netherlands put centrists into power. A pro-euro, pro-globalization reform agenda could make the single European currency more appealing in the longer term.
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Asia-Pacific: tortoise and the hare?

28/06/2017
The developing Asia-Pacific economies are powering ahead like the speedy hare in the classic fable, although we are less optimistic on the outlook for some of the more developed regional countries that plod along like the fable’s tortoise. Resilient global trade continues to be a tailwind, and AsiaPacific equities currently appear slightly expensive after a strong secondquarter performance.
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Global Market Outlook - Q3 update: Late-cycle lean out

28/06/2017
Our Investment Strategist team deliver the outlook for the third quarter. We're in a late-cycle, momentum-driven market, where valuation is at an extreme. Momentum can drive markets beyond fundamentals for an extended period. No investment process is going to pick the peak in the cycle, but we'd lean out as risks increase
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Why hold bonds in a rising rate environment?

8/06/2017
Amid concern about the outlook for interest rates, many investors are questioning the value of holding bonds as part of a diversified portfolio. The thought is that if interest rates are rising, portfolios should have a materially lower allocation to bonds, or that cash is a better alternative. Yet investors should look beyond short-term movements and consider the longer-term rationale for having fixed income within a portfolio.
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