Investment Outlook

Strong global growth and the AI capital-expenditure boom should sustain risk appetite and support positive returns across credit and equities into 2027, despite sticky inflation and tighter monetary policy.

• US real consumption growth is projected at around 2.5% in 2027, while labor markets remain supportive of global consumption and corporate profitability.
• The AI capex cycle is boosting activity, with hyperscaler estimates covering NVDA, AAPL, GOOGL, ORCL, MSFT, AMZN and META; the authors see upside risk to already high spending forecasts.
• Corporate fundamentals remain strong: US and European high-yield yields were near 8.0% and 7.0%, respectively, on September 20, 2026, while operating margins are near record highs and credit markets have absorbed substantial AI-related issuance.
• Core inflation is expected to remain above the 2.0% central-bank target for longer, limiting the prospect of a major bond rally; instead, government yields should drift slowly lower as inflation cools.
• The authors prefer selected local-currency debt in Brazil, Colombia, Mexico, Hungary, South Africa, New Zealand and Australia, and favor large-cap US and non-US equities as earnings growth remains robust despite slowing from 2026's exceptional levels.
• Key risks are more aggressive central-bank tightening, oil disruptions through the Strait of Hormuz, an AI investment slowdown or regulatory crackdown, and failure of 2027 earnings expectations above 13% growth.

Takeaway: Stay selective, collect carry and buy pockets of weakness: credit and equities can still deliver positive returns, while high-quality government bonds remain a distant downturn hedge and the outlook depends on persistent growth, contained inflation and continued AI investment.