Schroders Multi Asset team upgrades global equity outlook as US jobs surprise

Schroders has upgraded our view on global equities to positive from neutral. We maintain the view that US growth will remain above trend in the coming year and expect the Federal Reserve to implement rate cuts in support of the labour market. We believe this move will contribute to renewed acceleration in both growth and inflation in 2026.

Our previous neutral stance on US equities in recent weeks was primarily due to heightened market exuberance and heavy positioning in US equities. This has recently moderated with a reduction in exposure. A robust US earnings season and signs of a recovering jobs market have prompted us to upgrade our view in November. While the unemployment rate has risen since the September employment data, this has been driven by a higher participation rate. We had been waiting for confirmation that job creation had paused following Liberation Day, and have been encouraged by the most recent jump in non-farm payrolls to 120,000. Although we expect the recent government shutdown to negatively impact GDP growth in Q4, we do not see this as sufficient reason to alter our 2026 economic outlook. The recovery in earnings among the other 493 S&P 500 stocks this month has also been a positive sign.

We have also upgraded Japanese equities to positive. Japanese earnings revisions remain strong and corporate buybacks are approaching US levels. Policy backdrop is supportive with the Bank of Japan steady and the LDP leadership favouring stimulus and corporate reform. Our macro earnings models were lifted by recent Yen weakness.

We continue to remain positive on emerging market (EM) equities, although valuations are no longer cheap. Within EM we like Latin America given its relative value to the index as a whole but also compared to its own history, coupled with improving earnings revisions.

We remain neutral on Europe, despite the favourable economic backdrop. European earnings momentum is still soft with Q3 earnings below 3%. The automotive and energy industries remain drags, but excluding these, the growth trend is improving. Fiscal expansion from Germany should lift earnings per share in 2026 based on our models. We keep neutral on the region overall as we expect German fiscal expansion to occur in the latter half of next year.

For professional investors and advisers only. The material is not suitable for retail clients.

We define “Professional Investors” as those who have the appropriate expertise and knowledge e.g. asset managers, distributors and financial intermediaries.​

Investment involves risk.

This information is a marketing communication. The information contained herein is believed to be reliable. Where third-party data is referenced, it remains subject to the rights of the respective provider and must not be reproduced or used without prior consent.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

The material is not intended to provide, and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions.

Any references to securities, sectors, regions and/or countries are for illustrative purposes only.

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any investments to rise or fall.

Schroders has expressed its own views and opinions in this document and these may change.

This document may contain “forward-looking” information, such as forecasts or projections. Any forecasts stated in this document are not guaranteed and are provided for information purposes only.

Issued in November 2025 by Schroders Investment Management Ltd registration number: 01893220 (Incorporated in England and Wales) which is authorised and regulated in the UK by the Financial Conduct Authority and an authorised financial services provider in South Africa FSP No: 48998. ​