Outlook 2027: The Price of Progress
Sources, Key Risks and Important Information
CHART SOURCE
Fragmentation : Grids, guns and gigabytes: Security spending is on the rise
Global Fire Power, Stanford Unversity Human-Centered Artificial Intelligence, ChinaTalk, Notre Dame University. Defense capability data as of 2025. Note: Defense capability determined using Global Firepower’s 2026 PowerIndex (Military Strength Rankings). We classify ranks 1–25 as Strong, 26–75 as Medium and 76–145 as Weak; these are editorial thresholds, not GFP categories. Chokepoint exposure is a qualitative analyst assessments of energy, critical-mineral and semiconductor dependencies on a 1–5 exposure scale, informed by Naveen Krishnan’s economic-security framework in ChinaTalk’s “How to Score Economic Security” (May 4, 2026). Group ratings apply those thresholds to the median rank of ranked members. Europe includes the 21 EU countries using the euro and the UK. LatAm comprises 20 sovereign Latin American states: Mexico; the six Spanish-speaking states of Central America; Cuba, the Dominican Republic and Haiti; and the ten Spanish- or Portuguese-speaking sovereign states of South America. Belize, Guyana and Suriname are excluded under this language-based definition.
KEY RISKS
Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss.
Diversification and asset allocation does not ensure a profit or protect against loss. The price of equity securities may rise or fall due to the changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Share values can rise with strong earnings or positive market expectations, but they can also fall due to weak earnings or negative sentiment, and dividends are not guaranteed.
Investing in fixed income products (such as bonds) is subject to certain risks, including, but not limited to, interest rate, credit, inflation, call, default, prepayment and reinvestment risk. Any fixed income security sold or redeemed prior to maturity may be subject to substantial gain or loss.
International investments may not be suitable for all investors. International investing involves a greater degree of risk and increased volatility. Some international markets may not be politically or economically stable. Foreign holdings are subject to currency risk, as fluctuations in exchange rates between the investment’s foreign currency and the holder’s domestic currency can affect the value of the investment.
IMPORTANT INFORMATION
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GENERAL RISKS & CONSIDERATIONS
Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.
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