Global Outlook August 2026
In this month’s Global Outlook video, Bill Dinning, Chief Investment Officer, discusses the strong corporate earnings environment and what it means for investors. Earnings growth expectations have been upgraded significantly this year, supported not only by AI-related companies but also by broader economic resilience across key regions.
Bill also explores changes to Federal Reserve communication under its new Chair, Kevin Warsh. While the move away from extensive forward guidance has prompted debate among market participants, Bill puts the shift into historical context. He argues that a greater focus on current economic conditions rather than long-term forecasts should not be viewed as a negative development for markets.
Key takeaways
- Strong corporate earnings are supporting equity markets
Global earnings growth is running at unusually strong levels, with expectations having risen significantly during the year. While AI-related companies are an important driver, strength is also evident across other sectors and regions. - Investment opportunities extend beyond AI
Robust economic growth and fiscal support are contributing to a healthier corporate backdrop globally, creating potential opportunities across the US and other markets, as well as beyond the technology and AI sectors. - Changes in Federal Reserve communication should be viewed in context
The Federal Reserve’s approach to communicating monetary policy has evolved several times over recent decades. A move away from forward guidance may create some additional uncertainty, but the video argues that this shift need not be disruptive for markets.
Glossary
Corporate earnings: The profits generated by companies over a given period. Earnings growth can provide an indication of corporate health and can influence share prices and wider equity market performance.
Forward guidance: Communication from a central bank about the likely future direction of monetary policy, particularly interest rates, designed to help markets understand how policy may develop.
Federal funds rate: A key US interest rate used by the Federal Reserve as part of monetary policy. Changes to the rate can influence borrowing costs, economic activity and financial markets.
This material is provided for informational purposes only and does not constitute investment advice or a recommendation. The views expressed reflect current market conditions and are subject to change without notice.
All materials have been obtained from sources believed to be reliable, but their accuracy is not guaranteed. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.
Investment strategies presented are not suitable for all investors and do not represent the experience of other clients. Results may vary and are subject to change based on market conditions and individual circumstances. Investors should consult their financial and tax advisors to assess the suitability and risks of any investment.
Portfolios may include investments in illiquid assets, securities subject to counterparty risk, and instruments sensitive to changes in exchange or interest rates. Derivatives such as futures, options, structured notes, and contracts for differences may be used for risk management or investment purposes but may also involve a higher level of risk and may not be suitable for all investors. There is a risk of loss and of counterparty default on such instruments.
