Invesco Canada blog

Insights, commentary and investing expertise

Five issues for investors to watch


November 13, 2018
Subject | Invesco | Macro views

Last week, the U.S. experienced a deepening split in political leadership, which dominated headlines. And yet, that was just the tip of the iceberg in terms of events that are impacting global markets. Below, I recap five key events from last week and highlight five issues to watch moving forward, including whether there are grounds for new alliances among U.S. President Donald Trump and the Democratic House.

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Anticipating the U.S. midterm results


November 6, 2018
Subject | Invesco | Macro views

October has come to an end – and what a miserable month it was for stocks. The Dow Jones Industrial Average fell more than 5%, the S&P 500 Index lost 6.9% (its worst month in seven years) and the Nasdaq Composite Index dropped 9.2% (its worst month since November 2008).1 Looking beyond the U.S., the MSCI EAFE Index gave up 8% during the month while the MSCI Emerging Markets Index lost 8.7%.1 And beyond stocks, major bond indices, such as the Bloomberg US Aggregate Bond Index and the FTSE Russell Emerging Markets Broad Bond Index, also gave up some ground.1 Real estate investment trusts lost 3% as represented by the MSCI REIT US Index, while commodities lost 2% as represented by the Bloomberg Commodity Index.1 One of the few bright spots in October was gold, with spot prices rising 2.8%.1

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October lives up to its frightening reputation for investors


October 30, 2018
Subject | Institutional | Invesco

Once again, the month of October has been living up to its frightful reputation for wreaking havoc on stock prices: 1929 and 1987 are prime examples, and we can now safely say that 2018 will also go down in history as an illustration of October’s ability to scare investors. Unfortunately, I don’t foresee this volatility easing too much over the next few weeks.

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Five issues rattling global markets


October 23, 2018
Subject | Invesco | Macro views

There was no rest for the weary last week, as geopolitical developments came fast and furious, and capital markets reacted. Below, I cover five important issues that have continued to contribute to stock market volatility –  some of which flew under the radar during the week’s flood of news –  and highlight five issues to watch this week.

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Tariffs: Examining the economic and capital market consequences

Trade tensions have escalated in recent months to a point we haven’t seen in many years. At times in the past year, protectionist threats and actions have sent stocks downward, but investors have been all too willing to believe the threat has passed at the first sign of an abatement in trade drama. For example, after downward pressure on stocks caused by trade worries, Chinese President Xi Jinping’s conciliatory speech at the Boao Forum in March was all investors needed to hear to send stocks upward. But the elation was short-lived, as it soon became clear that President Xi had no interest in making serious concessions.

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Will the global stock sell-off continue?


October 16, 2018
Subject | Invesco | Macro views

It was yet another week in which I felt like we lived 100 weeks. Of course the biggest event was the stock market sell-off. U.S. stocks led what became a global sell-off, which slowed and actually began to reverse on Friday. The key question on investors’ minds is: Is this over? Or will stocks lose more ground? Before we can gauge the likelihood of this sell-off continuing, we must understand its origins. There were two catalysts for the stock market drop – and they are the two key risks I have been warning about for more than a year: U.S. Federal Reserve (Fed) normalization and trade.

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U.S. stocks plunge in tech-fueled rout


October 11, 2018
Subject | Invesco | Macro views

On Wednesday, U.S. stocks fell dramatically, with the Dow Jones Industrial Average falling more than 800 points. The rout was led by technology stocks, with the NASDAQ Composite Index down 316 points, but all sectors experienced losses.1 This was the worst one-day sell-off for U.S. stocks since February. For much of the day, bonds sold off as well but, by the end of the day, investors fled to the perceived safety of U.S. Treasuries, sending yields lower.

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Five things to watch in October

Perhaps the biggest news of the last week was the meeting of the Federal Open Market Committee (FOMC), the policy-making arm of the U.S. Federal Reserve (Fed). As expected, the Fed raised interest rates. But what was far more interesting were the hints provided about the future. In this blog, I discuss my outlook for the Fed and highlight five issues to watch in October.

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Stocks shrug off rising geopolitical risks


September 25, 2018
Subject | Invesco | Macro views

Last week brought bad news on trade and Brexit, yet stocks globally shrugged off the news and rose higher. In the U.S., the S&P 500 Index hit new highs (albeit on low breadth), while the yield on the 10-year Treasury bond surpassed the key 3% level.1 Because the 10-year U.S. Treasury yield tends to be a far more accurate fear gauge than any equity indicators (such as the VIX), I can’t help but be fixated on a few questions: Why did the 10-year yield rise? And where will it go from here?

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Trade remains the top concern for global markets


September 11, 2018
Subject | Invesco | Macro views

Every week I hope that there are no new trade developments, so that for at least one week I can spare you all from a trade discussion in this blog. Unfortunately, this is not that week – there were many trade developments over the past few days, and I feel compelled to discuss them because I firmly believe the trade situation poses a significant risk to the economy and markets.

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Reading the tea leaves from the central banks


August 28, 2018
Subject | Invesco | Macro views

What did we learn last week from the central banks, trade talks and the markets?

Last week gave us a look into the thoughts of the U.S. Federal Reserve (Fed) as Fed Chair Jay Powell gave a widely anticipated speech, and the Federal Open Market Committee (FOMC) released the minutes from its most recent meeting. Some of the messages were clear, while other statements required observers to read between the lines. Below are five key takeaways from last week, and five items I’m watching going forward:

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What currency pressures in Turkey and other countries may mean for investors


August 14, 2018
Subject | Institutional | Invesco | Macro views

Activity in currency markets has more than tripled in the last two decades. Between 2001 and 2016, global turnover in currency markets rose from $1.2 trillion to $5.1 trillion,1 and the geopolitical disruption of the last two years has increased currency activity even further. Last week brought several significant examples of this trend in the U.K., China, Iran and – most dramatically – Turkey. Is this a sign of more disruption to come?

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Is it time to worry about a liquidity crisis?


July 31, 2018
Subject | Invesco | Macro views

One of the key risks to markets that I’ve been discussing for more than a year is balance sheet normalization. I have argued — and continue to argue — that quantitative easing was a big experiment, and so unwinding it is an experiment in and of itself. Now that balance sheet normalization has been in force for more than half a year, we are seeing its effects. And one key effect is on liquidity.

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Trade wars: A worldwide web of worry


July 24, 2018
Subject | Invesco | Macro views

Global stocks have been in positive territory thus far in July with even emerging markets stocks eking out a tiny gain.1 With positive returns and relatively low volatility in July, it appears that the stock market is not worried about the burgeoning trade war. Admittedly, it’s easy to ignore since investors don’t have a frame of reference for the impact of a major trade war – and so far, earnings season has been very good. But other markets may be telling us that we should be worried.

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