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Canada
We see good evidence that Prime Minister Mark Carney and his cabinet are making efforts to grow the Canadian economy and increase economic resilience through supportive policy and infrastructure development.
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United States
The market has reached new highs, driven primarily by an unusually strong earnings revision cycle and continued artificial intelligence (AI) capital expenditures by major technology companies.
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Europe
Despite the macroeconomic uncertainties, the near-term earnings environment for European equities remains surprisingly robust.
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Asia
Asia's macroeconomic outlook for the next 12 months reflects a transition toward moderate growth amid persistent energy shocks. Regional GDP growth is expected to be anchored by a sustained global tech upcycle and AI-related demand.
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Emerging markets
After decades of playing supporting roles, emerging economies are learning to fly independently, powered by rising domestic demand, deepening economic integration, and growing financial autonomy.
The war in Iran has injected significant uncertainty into the outlook and widened the range of potential outcomes for the economy and financial markets. While risks have intensified, our base case scenario still sees the economy continuing to grow amid a variety of existing tailwinds, allowing stocks to outperform bonds, particularly in non-U.S. regions where valuations are relatively appealing.
Economy
The economic backdrop remains surprisingly resilient despite the energy shock, with economic data in both the U.S. and the G10 better than it was a year ago.
Fixed income
We forecast low-to-mid single-digit returns for government bonds, with the potential to earn higher returns in corporate bonds, though the added compensation for taking credit risk is historically small.
Equity markets
Following the strong gains of the past quarter, stocks are pricing in an optimistic scenario, assuming that the supportive macro backdrop and rapidly growing profits persist.
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