Weekly Market Update

Our Asset Allocation team comments on what’s moving markets and how the PIMCO GIS Dynamic Multi-Asset Fund (DMAF) is positioned.


  • Access these views via the Dynamic Multi-Asset Fund, a dynamic fund designed to deliver across market environments and help investors navigate the toughest market situations.

From the desk of Our Asset Allocation team, Friday 16th February 2024.

US exceptionalism revisited

Economic activity in the world, ex-US, has been uninspiring. We learned that both the UK and Japan were in technical recession in the second half of 2023 after both countries released GDP prints for Q4, 2023 that were below expectations. The UK contracted at an annualised pace of 1.4% in Q4, 2023 as measured by the quarter over quarter, seasonally-adjusted annual rate (qoq, saar) after a pace of -0.5% annualised in third quarter of last year. Japan contracted at -0.4% (qoq saar) annualised in Q4 after -3.3% in Q3, 2023 and it lost its spot of third largest global economy to Germany as a result.

Europe is not faring much better: while it avoided a technical recession in the second half of last year, the European Commission revised down its 2024 growth forecast for the eurozone to a paltry +0.8%, down from a prior forecast of 1.2%, and therefore barely accelerating from the pace of 2023 of 0.5%. Australia is also showing signs of strains, but in the labour market, with an unemployment rate that reached a two-year high of 4.1% versus 3.9% prior.

When looking at earnings from companies, the picture is in line with these paltry indicators of growth. With around half having reported in Europe, companies are not really producing positive surprises, and earnings growth for the Eurostoxx 600 looks to be a low single digit of around 2% for now but could fall even lower as the season evolves.

Meanwhile, the US earnings vintage continues to produce a hefty rate of beats, with well in excess of 70% of the reporting companies coming in at 7.5% above consensus expectations for the S&P500. This should result in an overall earnings per share (EPS) growth in the high single digits around +7%-8% year over year (yoy). But looking a little closer, that figure is the average of a rather lop-sided club: the Magnificent 7 will likely produce earnings growth of around 70% while the 493 other companies are likely to publish a negative number of circa -3%yoy! So it could be that American companies are not that much different after all: excluding the 7, they are certainly facing similar difficulties to their European counterparts.

On the economy front, data for the United States could be suffering from one-off January effects and still turbulent seasonal adjustments from the pandemic. One data point certainly doesn’t make a trend but there were confusing data prints pointing to a significant deceleration of consumption (-0.8% month over month), while inflation could be sticky indeed (+0.85% mom for the super core – the highest since April 2022, accelerating to 4.3%yoy from 3.9% prior). This is a headache for the Fed. Front-end rates have therefore been aggressively on the move lately, now only pricing 90 basis points (bps) of rate cuts by the Fed in 2024, starting around June/July, versus 150bps of cuts starting from March just a few weeks ago.

The only central bank that can claim victory these days is the Swiss National Bank as its January CPI came in at +1.3%yoy against expectations at 1.7%, while core inflation is down at 1.2%yoy. Nevertheless, the Bank of England was also handed a nice surprise with the January CPI coming in at -0.6%mom against expectations of -0.3%mom, and core a smidge lower at 5.1%yoy versus 5.2% expected.

The US economy remains exceptional in its resilience. The Atlanta Fed GDPNow print might have been revised lower to 2.86% versus 3.42% for Q1, 2024 but there could be signs of re convergence on growth (lower) and inflation (higher). Moreover, companies’ earnings are not that different when excluding the Magnificent 7. The central bank race of which will cut first remains wide open!


How can DMAF benefit investors in today’s uncertain markets?

  1. Provide optionality
  2. Enhance returns
  3. Control risk

View the fund

Rechtliche Hinweise

Data as of 16th February 2024 unless otherwise stated.

Marketing Communication

This is a marketing communication. This is not a contractually binding document and its issuance is not mandated under any law or regulation of the European Union or the United Kingdom. This marketing communication does not include sufficient detail to enable the recipient to make an informed investment decision. Please refer to the Prospectus of the UCITS and to the KIID/KID before making any final investment decisions.

For professional use only

The services and products described in this communication are only available to professional clients as defined in the MiFiD II Directive 2014/65/EU Annex II Handbook and its implementation of local rules and as defined in the Financial Conduct Authority's Handbook. This communication is not a public offer and individual investors should not rely on this document. Opinion and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness.

Additional Information/Documentation

A Prospectus is available for PIMCO Funds and UCITS Key Investor Information Documents (KIIDs) (for UK investors) and Packaged retail and insurance-based investment products (PRIIPS) key information document (KIDs) are available for each share class of each the sub-funds of the Company.

The Company’s Prospectus can be obtained from and is available in English, French, German, Italian, Portuguese and Spanish.

The KIIDs and KIDs can be obtained from and are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the UCITS Directive).

In addition, a summary of investor rights is available from .The summary is available in English.

The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. PIMCO Global Advisors (Ireland) Limited can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.”


Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to themarket’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss.

Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions, or are appropriate for all investors, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.


The portfolio analysis is based on the indices and representative account shown and no representation is being made that the structure of the average portfolio or any account will remain the same or that similar returns will be achieved. Results shown may not be attained and should not be construed as the only possibilities that exist. Different weightings in the asset allocation illustration will produce different results. Actual results will vary and are subject to change with market conditions. There is no guarantee that results will be achieved. No fees or expenses were included in the estimated results and distribution. The scenarios assume a set of assumptions that may, individually or collectively, not develop over time. The analysis reflected in this information is based upon data at time of analysis. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.

PIMCO routinely reviews, modifies, and adds risk factors to its proprietary models. Due to the dynamic nature of factors affecting markets, there is no guarantee that simulations will capture all relevant risk factors or that the implementation of any resulting solutions will protect against loss. All investments contain risk and may lose value. Simulated risk analysis contains inherent limitations and is generally prepared with the benefit of hindsight. Realized losses may be larger than predicted by a given model due to additional factors that cannot be accurately forecasted or incorporated into a model based on historical or assumed data.

Past performance does not predict future returns

This presentation contains the current opinions of the manager and such opinions are subject to change without notice. This presentation has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this presentation may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark or registered trademark of Allianz Asset Management of America LLC in the United States and throughout the world. ©2024, PIMCO

PIMCO Europe Ltd (Company No. 2604517, 11 Baker Street, London W1U 3AH, United Kingdom) is authorised and regulated by the Financial Conduct Authority (FCA) (12 Endeavour Square, London E20 1JN) in the UK. The services provided by PIMCO Europe Ltd are not available to retail investors, who should not rely on this communication but contact their financial adviser. PIMCO Europe GmbH (Company No. 192083, Seidlstr. 24-24a, 80335 Munich, Germany), PIMCO Europe GmbH Italian Branch (Company No. 10005170963, via Turati nn. 25/27 (angolo via Cavalieri n. 4), 20121 Milano, Italy), PIMCO Europe GmbH Irish Branch (Company No. 909462, 57B Harcourt Street Dublin D02 F721, Ireland), PIMCO Europe GmbH UK Branch (Company No. FC037712, 11 Baker Street, London W1U 3AH, UK), PIMCO Europe GmbH Spanish Branch (N.I.F. W2765338E, Paseo de la Castellana 43, Oficina 05-111, 28046 Madrid, Spain) and PIMCO Europe GmbH French Branch (Company No. 918745621 R.C.S. Paris, 50–52 Boulevard Haussmann, 75009 Paris, France) are authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) (Marie- Curie-Str. 24-28, 60439 Frankfurt am Main) in Germany in accordance with Section 15 of the German Securities Institutions Act (WpIG). The Italian Branch, Irish Branch, UK Branch, Spanish Branch and French Branch are additionally supervised by: (1) Italian Branch: the Commissione Nazionale per le Società e la Borsa (CONSOB) (Giovanni Battista Martini, 3 - 00198 Rome) in accordance with Article 27 of the Italian Consolidated Financial Act; (2) Irish Branch: the Central Bank of Ireland (New Wapping Street, North Wall Quay, Dublin 1 D01 F7X3) in accordance with Regulation 43 of the European Union (Markets in Financial Instruments) Regulations 2017, as amended; (3) UK Branch: the Financial Conduct Authority (FCA) (12 Endeavour Square, London E20 1JN); (4) Spanish Branch: the Comisión Nacional del Mercado de Valores (CNMV) (Edison, 4, 28006 Madrid) in accordance with obligations stipulated in articles 168 and  203  to 224, as well as obligations contained in Title V, Section I of the Law on the Securities Market (LSM) and in articles 111, 114 and 117 of Royal Decree 217/2008, respectively and (5) French Branch: ACPR/Banque de France (4 Place de Budapest, CS 92459, 75436 Paris Cedex 09) in accordance with Art. 35 of Directive 2014/65/EU on markets in financial instruments and under the surveillance of ACPR and AMF. The services provided by PIMCO Europe GmbH are available only to professional clients as defined in Section 67 para. 2 German Securities Trading Act (WpHG). They are not available to individual investors, who should not rely on this communication. PIMCO (Schweiz) GmbH (registered in Switzerland, Company No. CH-, Brandschenkestrasse 41 Zurich 8002, Switzerland). The services provided by PIMCO (Schweiz) GmbH are not available to retail investors, who should not rely on this communication but contact their financial adviser.