In 2024, global markets navigated a complex landscape marked by geopolitical tensions, economic policy shifts, and evolving investor sentiments. As we approach 2025, these dynamics underscore the importance for investors to remain vigilant and adaptable, as several asset managers highlight in their global market outlook for the next year.

“This is not a landing,” suggests Robeco in their 2025 global market outlook. “In our view, 2025 will be another year of a treacherous macro climate with many idiosyncratic crosswinds. By occasionally signalling some economic weakness, the data will blur broader economic resilience.”

The asset manager warns that central bankers need to tread carefully. They argue that underestimating inflation risks relative to growth risks in 2025 could lead to excessive monetary easing—driving policy rates below the natural rate. This misstep could hasten an inflationary inflexion point, especially in an environment marked by procyclical fiscal policies and rising cost-push inflation driven by renewed tariffs and supply chain disruptions.

This caution comes as 2024 showcased a precarious balancing act between fostering economic growth and controlling inflation. Persistent geopolitical tensions, evolving trade policies, and a resurgence of fiscal stimulus shaped global markets, while supply-side constraints amplified price pressures across key sectors.

“Solid growth” for the global economy?

Goldman Sachs Research forecasts a year of “solid growth” for the global economy, with a worldwide gross domestic product (GDP) expanding 2.7% on an annual average basis.

“Global labour markets have rebalanced,” says Goldman Sachs Research Chief Economist Jan Hatzius in “Macro Outlook 2025: Tailwinds (Probably) Trump Tariffs.” 

“Inflation has continued to trend down and is now within striking distance of central bank targets. And most central banks are well into the process of cutting interest rates back to more normal levels,” he adds.

Looking at regions, Goldman Sachs economists project that the U.S. will outperform expectations, while the euro area lags behind, hindered by fresh tariffs anticipated under Trump’s administration.

Macquarie’s Chief Economist, Ric Deverell, also expects robust growth for the global economy—at least for the first half of 2025. “The outlook beyond that will, to a large degree, depend on the timing and magnitude of fiscal, trade, and immigration policies in the U.S.,” he notes. Deverell warns, “With markets priced to perfection, that could mean the first half of the year is the calm before the storm.”

Global Market Outlook: Equities

The consensus among asset managers suggests that equities remain a key component of diversified portfolios, albeit with caution.

“Going into 2025, strong company fundamentals and trends in innovation could be outweighed by increased geopolitical risk and policy uncertainty,” says Melda Mergen, Global Head of Equities at Columbia Threadneedle. She highlights that companies with solid fundamentals, which have adapted to the challenging operating environment of recent years, are likely to lead. Mergen further notes that the easing cycle by the Federal Reserve is an “important milestone” for equities, as it lowers the cost of capital and makes planning easier for businesses.

BlackRock’s 2025 outlook identifies AI and geopolitics as critical themes. The asset manager emphasises opportunities in U.S. equities, driven by the AI revolution and resilient corporate earnings, despite high valuations in some sectors. “Mega forces like AI are transforming economies, breaking historical trends,” BlackRock points out, recommending that investors focus on themes and adopt tactical views.

Schroders highlights that equities have become expensive following the prolonged bull market. Alex Tedder, Co-Head of Equities at Schroders, observes that the U.S. market is “extremely highly valued,” while other regions, including traditionally undervalued markets like the UK and Japan, are “by no means bargain-basement.” He adds that these stretched valuations make equity markets vulnerable to external shocks, such as geopolitical conflicts.

Emerging markets offer opportunities for growth. Newton Investment Management notes that companies driving digital transformation are particularly compelling. “Several emerging-market companies are global leaders in transformation, especially in artificial intelligence. Yet the valuations of emerging-market technology enablers lag behind their developed-market peers,” says Liliana Castillo Dearth, Head of Emerging Markets and Asia Equities.

Pictet Asset Management maintains that equities are likely to outperform bonds in 2025, citing resilient growth and falling interest rates. “Resilience will be the distinguishing feature of global equity markets in 2025, with companies likely to deliver steady earnings growth, translating into single-digit returns for investors,” writes the Pictet Asset Management Strategy Unit.

Global Market Outlook: Bonds

While equities dominate the spotlight, fixed income markets are positioned to make a comeback. “Fixed income is poised to play a significant role in 2025,” says Mohit Mittal, CIO Core Strategies at Pimco.

“We have had a generational reset higher in yields following the inflation scare of 2021 and 2022. What that meant was that a significant value got created in fixed income. Now, as central banks are embarking on a rate-cutting cycle, it’s a really attractive opportunity for investors to capitalise on those higher yields,” he explains.

Pictet is similarly optimistic, suggesting that the bond market environment will be favourable despite moderate returns. “While bonds may not deliver outsized returns next year, the investment landscape is unlikely to be hostile for fixed income assets,” notes the Strategy Unit. Among key opportunities, they highlight emerging market bonds outside China.