Equity Outlook  |  Q3 2017

Positive fundamentals may be tested by policy uncertainty

Equity insights


  • International markets may continue to attract investors in the second half of 2017, particularly in Europe, which lags the U.S. economic cycle.
  • In the United States, a number of favorable trends remain in place and are likely to keep politics from derailing market momentum.
  • The latest twists and turns of Brexit have caused many to overlook stocks that we think are fundamentally strong.

For U.S. equity investors, the second quarter offered a number of familiar themes: relatively low volatility, new record highs for major indexes, and a modest advance for stocks. Along with these positive trends, however, came a decidedly lower level of optimism about progress from Washington in implementing pro-growth, business-friendly policies. Non-U.S. stocks across the developed and emerging markets outperformed their U.S. counterparts for much of the second quarter. Emerging-market stocks, in particular, continued to build on their momentum, as global interest rates remained low and the U.S. dollar's strength ebbed.

Emerging markets lead the way at the midpoint of 2017

Market scorecard


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For U.S. equity investors, the second quarter offered a number of familiar themes: relatively low volatility, new record highs for major indexes, and a modest advance for stocks.

What do you think has been the biggest driver of U.S. equity performance in 2017?

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EQUITIES AT PUTNAM

Aaron M. Cooper, CFA
Chief Investment Officer, Equities
Investing since 2000
Joined Putnam in 2011

Simon Davis
Co-Head of Equities
Investing since 1988
Joined Putnam in 2000

Shep Perkins, CFA
Co-Head of Equities
Investing since 1993
Joined Putnam in 2011