Global Outlook May 2026
In this month’s Global Outlook video, Bill Dinning 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:
- Despite rising Middle East tensions and a 60% year-to-date jump in US petrol prices, global equities have largely shrugged off the news, with markets more focused on the ongoing AI investment story.
- UK gilt yields have underperformed US Treasuries this year; the team attributes this to rising UK inflation expectations rather than a political risk premium, since sterling has stayed stable against the euro.
- The team still finds gilts attractive for long-term investors given the positive real yield on offer, and has kept its asset allocation unchanged, remaining neutral on global equities.
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