9% yields, 20% earnings: J.P.Morgan's investment playbook for 2027
The forward-looking view on equities, fixed income and private markets and how to play them.
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Plenty will undoubtedly happen between now and New Year's Eve, but the investing landscape for 2027 is already starting to take shape, and the broad view is a positive one.
At the J.P.Morgan Asset Management 2026 APAC Summit, where Jed Laskowitz, Global Head of Private Markets and Customised Solutions, Bob Michele, CIO & Head of Global Fixed Income, Currency & Commodities Group and Paul Quinsee, Global Head of Equities, offered their views on the outlook for next year and how investors should think about positioning.
Please note the summit was held on 27 October 2026.
The outlook on global equities
If there's one word that defines JPMAM Global Head of Equities' Paul Quinsee's view of markets it's "earnings".
"It all starts with earnings," he said.
"Earnings are growing in the US, they're growing in Europe, they're growing in Asia. They're growing in every region. 90% of the companies in the S&P 500 are going to have higher earnings in the next 12 months. That's about as good as it gets."
A strong year for earnings so far in 2026 has translated to a solid return for global equities, and that strength should extend into next year, says Quinsee.
"As we look at global earnings next year, we see around 20% gains, not quite as strong as the 30% this year, but that's still a very, very healthy number. And at the margin, that number is still moving up."
And it's happening at a time when the S&P 500's forward P/E multiple has actually come down - from 22x at the start of the year to around 18x today.
"We have strong earnings growth, reasonable valuations. We think it's a pretty good setup in 2027."
Of course, much of that is driven by the AI capex boom, and Quinsee says investors need to make sure they're not over-exposed given the ongoing risks.
"Sometimes the right thing to focus on is the obvious thing," said Quinsee.
"Data centre spending next year has to increase by over a trillion dollars. That money has to come a lot from the debt markets. That raises different types of questions around debt investment appetite risk and funding."
The other big risk is successfully backing the winners of the AI arms race, says Quinsee.
"Change is a constant in technology. Today's business may not be tomorrow's business. You have the biggest 10 tech companies in the world at the peak of the internet boom in 2000, only one of them today is in the top 10. That's Microsoft. The other nine are much less important and in some cases don't even exist anymore."
So if there was a second word to define Quinsee's outlook on equities markets right now, it would be diversification. As I reported a week ago, Quinsee's theme for 2027 isn't a sector or specific trade, it's an approach.
"The right theme as you're thinking about investing in equities next year is diversification," he said.
The outlook on fixed income
Only a few years on from the bond rout of 2022, 2027 is shaping up to be a year of plenty for fixed income investors, according to CIO & Head of Global Fixed Income, Currency & Commodities Group Bob Michele.
"There's a lot of yield out there," he said. "You can be very choosy about how you put together your portfolio and very careful about what the upside is and where the risks are."
Much of the outlook for fixed income centres around where US Treasury bonds go, and Michele believes there's still some room to run there.
"We expect both the Fed funds rate and the treasury curve to converge into the middle fours. You saw that the market's pricing in three Fed hikes, that takes you to about 4.58% as the midpoint for the Fed funds range."
That paints a fairly attractive picture for fixed income into 2027.
"The first thing is we expect to see some price appreciation," said Michele. "Then you get the carry on top of that, you start to go to other sectors in the market, you could add a percent to 3%."
"I think you're looking at a general bond market return in the US of somewhere around 7 to 8% over the next 12 months."
It also makes it a good time for active management, especially with real yields in the US around 3%, the highest they've been in almost 25 years. For Michele and JPMAM, it's created a "buying opportunity" across multiple markets.
"Where do you buy your duration from all markets that sold up? We took some in the US, but we also bought some duration in Japan. We looked at the 20-year part of the curve that was around 4%. That's as cheap as it's been in well decades. And then we also looked at Australia, which was a little bit ahead of the US in terms of hiking, and we put some duration there in 5% range."
Another emerging theme for fixed income investors is active ETFs, which offer liquidity and transparency on the one hand, with flexibility and accessibility on the other, says Michele.
"Active ETFs in the fixed income space are a gift to the end investor," he said.
Ultimately, the outlook for fixed income is as constructive as it's been in a very long time.
"We can put together a portfolio of government bonds with very good treasuries, very good central banks, with very little dependency on cross-border flows that yield nine-ish percent and have real yields close to 6%."
"We try to be user friendly. The kinder, gentler asset class."
The outlook for private markets
There's two key items on the 2027 agenda of Jed Laskowitz, Global Head of Private Markets and Customised Solutions.
One is a well-publicised thematic - energy demand - that has been grouped in with the AI supercycle, and the other is how private markets are operating right now.
"The theme about energy demand is really a global theme and there really isn't a country in the world where energy demand isn't going to grow at two to 3% a year for the next decade or two," said Laskowitz.
"This is not just an AI story, it's really about the electrification of virtually everything," he said. "So that is a very durable theme and a long-term theme that we're spending a lot of time on because of the risk return characteristics."
In private markets themselves, Laskowitz says there's been issues with unsold portfolio companies and difficult vintages on the one hand, but also plenty of new activity on the other.
"There's a significant amount of capital being raised in private equity today," he said. "The capital is just a little more discerning."
"And if you look back at the first half of this year, it was near record flows into VC and growth, but it was concentrated in around nine large rounds from about 80 companies. So I think investors in private equity will continue to be very discerning and the opportunities are going to be significant."
There are three areas seeing clear activity - AI, naturally, alongside healthcare and life sciences, and real estate.
"Native AI software companies are reaching $100 million for recurring revenue five times faster than traditional software companies," said Laskowitz.
In biotech, a tough period for the sector has given way to an influx of deals.
"This year there have been more billion-dollar transactions in the biopharma space than there were last year by a magnitude of almost two to one," he said. "So we expect that to be really creative for some of the smaller private companies that may want to be sellers to larger biopharma companies looking to rebuild their pipelines."
Finally, in real estate, the sector is still early in its post-Covid recovery cycle and there's one sector that is showing upside.
"Office, which has been challenging, is really starting to look more attractive," said Laskowitz. "People are back to the office and the supply side is changing. Office starts are down 80%. That can't last very long. There are segments of the market that have been forgotten about that we're coming back to and we see the opportunity for real estate to be strong in the next cycle."
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Tom is Deputy Managing Editor at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance.
He has previously worked at Finder, FourFourTwo and Man Of Many covering everything from film to football.
He has a Masters in Media Production and a Bachelor's in Journalism.
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Tom is Deputy Managing Editor at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance. He has previously worked at Finder, FourFourTwo and Man Of Many covering everything from film...
Expertise
Tom is Deputy Managing Editor at Livewire Markets, having worked as a writer and editor for 10 years, specialising in investing and personal finance. He has previously worked at Finder, FourFourTwo and Man Of Many covering everything from film...
Expertise
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