Macro views

Investment Outlook: Loomis Sayles

April 22, 2025 - 10 min read

With the global growth backdrop in reasonable shape, corporations should be able to operate near normal, in our view. Tariffs remain a country-dependent wild card. If aggressive tariffs are put in place, a higher cost of doing business poses risks to corporate profitability, according to Loomis, Sayles & Company’s Global Macro Strategist, Credit, Craig Burelle. Key macroeconomic drivers, along with sector outlooks, are analyzed.

Highlights

Macro drivers: Bottom-up consensus expectations for US corporate profit growth are likely to slip from the current +10% rate. Consumers and businesses are pulling back on consumption and investment in the face of tariff uncertainty, which will hit earnings to some extent.
Corporate credit: Risk premiums across the corporate bond market will likely rise as markets digest tariffs and a US growth slowdown. While credit spreads may widen from historically tight levels, spreads could compress as monetary and fiscal policy uncertainty fades.
Global equities: Earnings growth should support global equities in 2025, but US valuations may remain under pressure. US equities are in correction mode until more clarity on tariff magnitude and duration is established. Non-US equities could break to new highs.
Currencies: Often, the US dollar performs very well when systemic risks outside the US are unfavorable. We see the opposite shaping up currently. Policy regime shifts, particularly in Europe and Germany, should favor higher-trend growth in future years.

Loomis Sayles Investment Outlook

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This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed may change based on market and other conditions.

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