One of the most consistent themes in financial markets over the past 15 years has been the outperformance of US equities. A dollar invested in the S&P 500 at the low of the financial crisis in 2009 would now be worth over $10, more than double the return from European equities and around three times the return from UK, emerging markets or Chinese equities. An allocation of 100% US equities would have been difficult to beat. Why have US equities been so successful and will the trend continue?

Strong growth outlooks are counterbalanced by fiscal headwinds and above-target inflation, requiring a nuanced approach to capture value in emerging market debt.

Higher for longer interest rates need not be a deterrent for fixed income investing. In fact, we think the prospects for bonds are positive against a higher rate backdrop. We explain more in our fixed income outlook.

Discover a ‘step out of cash’ solution.

As we move further away from a decade of ultra-loose monetary policy, bonds are once again proving their attractive diversification benefits. Our UK fixed income portfolio managers reflect on the recent bout of market volatility and outline the benefits of duration in an environment where investors are increasingly sensitive to weak macro data.

Following months of pain for bond markets hit by stubborn inflation and high interest rates, front-end credit remains a relative safe haven for investors, continuing to provide attractive relative risk adjusted returns. Here, our portfolio managers analyse the impact of so-called “wipeout” yields and spreads and outline why current attractive levels mean that the performance of front-end bonds is now much more insulated from further yield rises or spread widening than it has been in the past.

As conditions look ripe for a period of outperformance in US credit markets, Fidelity US Dollar Bond portfolio manager Rick Patel outlines three catalysts that could trigger the Fed to start cutting interest rates.

Since the onset of the year, Chinese authorities have embarked on strategic measures to stabilize the capital market and bolster economic growth. The People’s Bank of China (PBOC) has taken significant steps, including a 50 basis point cut in the reserve requirement ratio (RRR) – the largest since 2021 — followed by a historic 25 basis point decrease in the 5-year Loan Prime Rate (LPR). These policy actions have significantly boosted market sentiment, as reflected in the recent uplift in the Chinese stock market. These measures also align with our expectation of a supportive policy landscape in China for 2024.