2017 Global Market Outlook — Q3 Update

Q3 Update

Our global team of investment strategists advise caution in this late-cycle, momentum-driven market. They believe investors in the U.S. market have embraced a type of cognitive dissonance: equity valuations are sky-high, but Treasuries are overbought and low yields warn of lackluster growth. They’d lean out of the U.S. rally and look to buy the next dip or potentially better opportunities outside the U.S. market.

The team sees the strongest tailwinds for equity returns in Europe, followed by emerging markets and Japan. The team also views government bonds as expensive across markets, especially in Germany and the U.K., indicating yields will trend upward in the medium term after remaining in a range for the next few months.

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Key global market outlook highlights include:

  • Expensive U.S. equities are vulnerable to a pull-back
  • Treasuries remain expensive across regions
  • U.S. Federal Reserve (Fed) likely to halt Fed funds rate increases for 2017
  • Political risk in Europe has diminished, perhaps signaling a Eurozone renaissance
  • Lackluster returns in the Asia-Pacific region with developing economies to outperform
  • Low recession risk for the U.S. economy continues over the next year

 

Russell Investments releases its Global Market Outlook on a quarterly basis. The Outlook highlights the most recent economic insights and market expectations from the firm's global team of investment strategists. It is the most widely read of Russell Investments' publications.

Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and does not constitute investment advice.

The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.

Contributing authors

Paul Eitelman
INVESTMENT STRATEGIST, 
NORTH AMERICA

Graham Harman
SENIOR INVESTMENT STRATEGIST, ASIA-PACIFIC

Shailesh Kshatriya, CFA
DIRECTOR, CANADIAN STRATEGIES
Van Luu, Ph.D.
HEAD OF CURRENCY & FIXED INCOME STRATEGY

Kara Ng
SENIOR QUANTITATIVE INVESTMENT STRATEGY ANALYST

Andrew Pease
GLOBAL HEAD OF INVESTMENT STRATEGY

Abraham Robison
QUANTITATIVE INVESTMENT STRATEGIST
Wouter Sturkenboom, CFA, CAIA
SENIOR INVESTMENT STRATEGIST, EMEA

Alexander Cousley
INVESTMENT STRATEGY ANALYST

Stephen Wood, Ph.D.
CHIEF MARKET STRATEGIST
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