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The Global Economy Is Holding Up

November 19, 2025

Time to Read: 2 minutes

This past year was rife with risks to the global economy: policy changes, tariff uncertainty and more. Yet, the global economy held up as manufacturing and services activity strengthened across the world.

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The global economy remained resilient this past year during a time of pronounced policy and tariff uncertainty, as well as geopolitical tensions. Yet, fiscal support, monetary easing and strong capital expenditures helped economies deliver positive growth.

A key measure of economic conditions, the Global Composite Purchasing Managers’ Index (PMI), a weighted average of the global manufacturing and services PMIs, provides a snapshot of overall worldwide economic health. A reading above 50 indicates economic expansion, while a reading below 50 suggests a contraction. This metric is at its highest since August 2024 and underpins our positive outlook for global growth as we head into 2026.

A strong global economy is important to investors because increased economic activity leads to higher corporate profits, boosting stock prices. It is one of the reasons we maintain a constructive view on equities and why diversification across regions remains important.

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Job Market Hanging in There

Recent jobless claims data point to a resilient U.S. labor market, with both initial and continuing claims remaining low and signaling that unemployment is still contained. Although job growth has softened and remains subdued, March’s job growth of 178,000, the highest since 2024, is encouraging. Our constructive outlook still holds despite continued uncertainty related to the war in the Middle East.

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Markets Since Iran Conflict

Markets are reacting to the Middle East conflict with sharp moves across asset classes, signaling broad risk repricing and shifting safe-haven behavior. While volatility is elevated, fundamentals like earnings growth continue to support our constructive outlook.

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Signals from Spreads

Credit spreads have risen yet remain historically low, reinforcing our view that the oil shock is likely temporary — not a driver of long-term growth concerns.

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Dollar Strength: What Does It Mean for Markets?

Geopolitical tensions have lifted oil prices, sent stocks lower and driven flows into the safety of the U.S. dollar, which has strengthened versus peers. While a weaker dollar previously supported international equity outperformance, dollar stabilization now suggests that tailwind is fading, underscoring the importance of diversification across regions and asset classes.

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