Schroders Investment Weather Forecast: Global equity outlook finely balanced
The outlook for global equities in 2015 is finely balanced. While a strong US recovery and falling oil prices are supportive of global equity performance, concerns in Europe and emerging economies like Brazil may weigh on sentiment.
12 March 2015
A US-led recovery
The positive for equities is that the US is leading the global recovery and the economy continues to power ahead. Economic data generally has been strong and that is expected to continue in 2015.
Oil price slump to aid consumption
For countries that are very dependent on oil like India, Indonesia and Japan, the fall in oil prices provides a significant boost to consumers and to companies operating within those countries.
European risks remain
The principal danger for global equities is the continued weakness in developed market economies like Europe. The region looks to be at real risk of deflation in 2015 and that would be negative for global equities overall.
Oil stripping Brazil of purchasing power
While the oil price trend is positive for some emerging market countries, it is negative for others such as Brazil, which is a big oil exporter and is suffering badly from the decline in energy prices.
While the recovery in the US is boosting investor optimism, the falling oil price is having both positive and negative impacts on emerging market economies. This, combined with concerns in Europe, could weigh on global equities overall in 2015.
Important Information: The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.