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By  Ritu Vohora

Navigate the 2025 Global Market Outlook

Get a quick summary of the 2025 Global Market Outlook.

October 2024, On the Horizon -

Our 2025 Global Market Outlook summary video helps you navigate the winding road to normalization and explores the market implications. The rate‐cutting cycle has begun, but global central banks will continue to be data dependent. We anticipate a normalization of policy at a more gradual pace relative to market pricing. Growth is moderating but remains resilient, and although good progress has been made on inflation, it’s not over until it’s over—and is likely to remain volatile.

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Our 2025 Global Market Outlook helps you navigate the winding road to normalization and explores the market implications. The rate‐cuƫng cycle has begun, but global central banks will continue to be data dependent. We anticipate a normalization of policy at a more gradual pace relative to market pricing. Growth is moderating but remains resilient, and although good progress has been made on inflation, it’s not over until it’s over—and is likely to remain volatile. Labor markets are easing and are a key area to watch.   

Key risks include elevated geopolitical tensions, slowing growth, sticky inflation, and monetary policy missteps. As we navigate this new equilibrium, our porƞolio construction themes argue for continued diversification across stocks, fixed income, and real assets.  

Bond yields have been on a roller coaster ride as markets preempted policy shifts. Current market pricing implies upside risk to yields. Cash yields remain attractive, but longer‐duration fixed income is vulnerable. Although credit spreads are tight, all‐in yields look attractive. High yield bonds, bank loans, and emerging market bonds present income opportunities.  

Equity markets have been dominated by a handful of stocks. We are likely past the first innings of the AI infrastructure buildout. However, the AI wave isn't over—it’s evolving. And stock selection will be critical. We’re excited about a ‘golden age’ for health care, amid radical innovations such as GLP‐1 drugs and robotic surgery.

As economic growth broadens, we’re encouraged by earnings growth broadening across both sectors and regions. Diversifying into areas with valuation support and robust fundamentals, such as value and small‐cap stocks, seems prudent. We see select opportunities in underappreciated sectors such as energy, financials, and industrials.

2025 is shaping up to be a dynamic year, and an active approach, focused on fundamentals, will be key. Read the full report or watch the webinar replay to learn more.
Ritu Vohora Investment Specialist

Ritu Vohora is an investment specialist representing the firm’s views on capital markets in the Multi-Asset Division. She is a vice president of T. Rowe Price Group, Inc., and T. Rowe Price International Ltd.

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