Skip to content

Preview

 Global Market Outlook

  • The quarter began with uncertainty and ended with muted optimism after policymakers contained a banking and debt ceiling crisis. Focus returned to inflation and concerns that economic momentum may stall.
  • Central banks made progress on inflation; however, they remain hawkish as they battle “core” Consumer Price Index (CPI) inflation. U.S. labor markets largely remain strong while there appears to continue to be excess savings in the system. Bond markets were volatile as a result.
  • Credit spreads were supported by stronger than expected economic activity and equity markets. We anticipate corporate earnings to be revised lower and credit to remain subject to economic momentum and underlying rates, making for continued volatility until the hard vs. soft landing debate is resolved.
  • The reopening in China has been disappointing. Other emerging markets, especially in Latin America, have seen growth and lower inflation.

WHAT ARE THE RISKS?

Past performance is no guarantee of future results.  Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.

Equity securities are subject to price fluctuation and possible loss of principal. Fixed-income securities involve interest rate, credit, inflation and reinvestment risks; and possible loss of principal. As interest rates rise, the value of fixed income securities falls. International investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Commodities and currencies contain heightened risk that include market, political, regulatory, and natural conditions and may not be suitable for all investors.

U.S. Treasuries are direct debt obligations issued and backed by the “full faith and credit” of the U.S. government. The U.S. government guarantees the principal and interest payments on U.S. Treasuries when the securities are held to maturity. Unlike U.S. Treasuries, debt securities issued by the federal agencies and instrumentalities and related investments may or may not be backed by the full faith and credit of the U.S. government. Even when the U.S. government guarantees principal and interest payments on securities, this guarantee does not apply to losses resulting from declines in the market value of these securities.

Important Legal Information

This document is for information only and does not constitute investment advice or a recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. This document may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. Any views expressed are the views of the fund manager as of the date of this document and do not constitute investment advice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. 

There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. Franklin Templeton accepts no liability whatsoever for any direct or indirect consequential loss arising from the use of any information, opinion or estimate herein.

The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance.

Copyright© 2025 Franklin Templeton. All rights reserved. Issued by Templeton Asset Management Ltd. Registration Number (UEN) 199205211E.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.