Press release
Northern Trust Asset Management 2025 Global Investment Outlook: Expect U.S. Stocks to Outperform; High Yield Bond Market Is Attractive
Earnings Growth Backs U.S. Equities; Strong Credit Quality Supports High Yield Market; U.S. Money Market Funds Remain Attractive; Private Credit Has Room to
About this update from Northern Trust Corporation
[{"type":"text","content":"\nEarnings Growth Backs U.S. Equities; Strong Credit Quality Supports High Yield Market; U.S. Money Market Funds Remain Attractive; Private Credit Has Room to Grow\n\n\n CHICAGO & LONDON--(BUSINESS WIRE)--\nNorthern Trust Asset Management (NTAM), a leading global investment management firm with $1.3 trillion in assets under management as of September 30, 2024, expects strong earnings and healthy sales growth to support U.S. stock outperformance in 2025. In the fixed income market, income potential combined with generally higher credit quality make high yield bonds attractive for investors.\n\n\nSummarizing the outlook, NTAM Chief Investment Officer of Global Asset Allocation Anwiti Bahuguna, Ph.D., said: “In multi-asset portfolios, we maintain a preference for equities over fixed income. We expect U.S. equities to benefit from an economic soft landing and healthier corporate profits than most other regions. In 2025, we expect more modest gains for 60/40 portfolios with U.S. equities leading the charge again.”\n\n\nNTAM Chief Investment Officer of Global Fixed Income Christian Roth added, “Within fixed income, we continue to favor high yield bonds because of elevated yields, strong fundamentals and a supportive market backdrop. Credit ratings upgrades are outpacing downgrades, and the overall credit quality of the high yield market remains historically high.”\n\n\nNTAM’s 2025 Global Investment Outlook across all asset classes globally may be found here: https://www.northerntrust.com/united-states/insights-research/2024/investment-management/global-investment-outlook\n\n\nAsset class highlights include:\n\n\n\nU.S. Equities: We expect softer but continued U.S. economic growth to still translate into healthy earnings and revenue growth. We are also constructive on small cap equities, which will likely benefit from lower interest rates as about half of small cap debt is floating interest rate.\n\n\n\nHigh Yield Bonds: Above-average yields, combined with historically high credit ratings in the high yield market, support a strong outlook.\n\n\n\nMoney Markets: Money market funds remain an attractive alternative to other cash management options like deposits or Treasury bills, even as the Federal Reserve has started to cut rates. We see little chance of money market rates returning to near-zero. The Bank of England, with concerns over ...