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J.P. Morgan Asset Management - Investment Outlook for 2017

The Global Strategists at J.P. Morgan Asset Management discuss economic warming and political warnings for 2017



In summary:

  • A trend toward stronger U.S. economic growth and inflation could be accelerated by President-elect Trump’s fiscal plans. This, along with a warming in the global economy, is positive for global equities and negative for fixed income. However, growing global debt, the rise of political populism and geo-political threats all still highlight the need for diversification.
  • Interest rates should rise in 2017 but only at a modest pace due to sluggish global growth and very cautious global central banks. Investors may want to be long credit and short duration in their fixed income allocations.
  • U.S. equities should continue to perform well in the year ahead, bolstered by stronger growth in GDP and earnings. While interest rate increases should not derail equity gains, they could define winners and losers in 2017 with cyclicals (such as financials and technology) outpacing defensives (such as utilities and REITs).
  • Emerging market (EM) stocks and bonds are threatened by the potential for higher U.S. interest rates to produce a higher U.S. dollar. However, with attractive valuations relative to developed market (DM) assets and the return of a widening gap between EM and DM growth, EM assets clearly have an important role to play in producing long-term portfolio growth.

November 2016

Please note that these are the views of the authors for J.P. Morgan Asset Management and should not be interpreted as the views of RL360°.


Author

Dr. David Kelly, David Lebovitz, Gabriela Santos and Samantha Azzarello

Global Market Strategists, J.P. Morgan Asset Management
November 2016

Please note that these are the views of the authors for J.P. Morgan Asset Management and should not be interpreted as the views of RL360°.

360° fund links

A range of J.P. Morgan Asset Management funds can be accessed through our guided architecture products LifePlan, Oracle, Paragon, Protected Lifestyle, Protected Lifestyle Lebanon and Quantum, and also through our PIMS portfolio bond.