Russell Investments Insights

2018 Global Market Outlook
Running with the Bulls

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


Happy Holidays: Fed wraps up 2017 with another rate hike

13/12/2017
The U.S. Federal Reserve (the Fed) delivered another rate hike today, raising its target policy rate by 25 basis points to a new range of 1.25-1.50%.
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Bank of England rate hike: One and done

3/11/2017
The Bank of England (BoE) has bitten the bullet and hiked the base rate from 0.25% to 0.5%, but in a dovish turn also provided forward guidance that outlines a very gradual path for future hikes. This was a close call with compelling arguments in favour and against. We are in the against camp and looking ahead we expect the BoE will have to stand down. A one and done rate hike against such a dovish forward guidance background will only briefly impact markets, pushing down gilt yields and the pound and supporting equities.
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Market Overview Q3 2017

2/11/2017
Russell Investments’ 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 Investments’ view and outlook for the global markets in the future.
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Quarterly Fixed Income Survey: September 2017

23/10/2017
On the basis of this quarter’s results, it is clear that the dichotomy between what the credit market expects versus what the interest rate market expects, continues. We recommend that investors clip the coupon in credit, but maintain some dry powder for more opportunities ahead.
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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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