Invesco Canada blog

Insights, commentary and investing expertise

Global equities: A decade after the global financial crisis, a mixed bag of growth

Key takeaways

  • The overvaluation of structural growth stocks, such as technology stocks, is unsustainable, in our view.
  • For markets used to easy money, the transition to a more ‘normal’ period for central banks is likely to pose a challenge.
  • The European market looks a lot more attractively valued than the US, especially those stocks more sensitive to the direction of the economy, such as banks.

The outlook for global growth has become more mixed. While the synchronised economic expansion that I discussed in this piece last year is less widespread today, it should still be sufficient for corporate earnings to grow. Amid continued regime change – quantitative easing has given way to quantitative tightening, and interest rates are rising – the US continues to press ahead, while there is less momentum elsewhere.

Continued

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European Central Bank

2018 Investment Outlook: The synchronized economic expansion: How much further to run?

The global economy continues its synchronized recovery, as evidenced by robust data across regions. Indeed, all 45 countries tracked by the Organisation for Economic Co-operation are expected to post positive economic growth in 2017 for the first time in 10 years. Even more optimistically, 33 out of 45 countries are seeing accelerating growth. This has boosted international trade and commodity prices, and helped make the global expansion story gradually more self-sustaining. On this basis alone, the prospects for 2018 look positive, with broad-based improvements across the major developed economies and a number of emerging market economies expected to continue.

Continued

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Outlook 2017: Finding opportunities when valuations are high

The prospects for 2017 are likely to be heavily informed by what we have seen in the years since the financial crisis. Since 2008/2009, economic policy has focused almost exclusively on austerity measures and loose monetary conditions, such as ultra-low (and even negative) interest rates and quantitative easing (QE) programs. These measures were intended to slow the growth of debt relative to gross domestic product, to lower-risk free interest rates and stimulate economic activity. Whilst they have been successful to the extent that they have averted a 1929-style depression and a collapse of the banking system, they have been largely ineffective in engendering significant growth in the real economy.

Continued

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Brexit: U.K. votes to leave, what’s next?

After months of anticipation, U.K. voters have decided – in an historic move – to leave the European Union (EU) some 43 years after joining its predecessor, the European Economic Community, in 1973. The U.K. government, institutions and wider business community now have the task of addressing a multitude of financial, economic, fiscal and political implications and consequences.

Continued

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