Invesco Canada blog

Insights, commentary and investing expertise

Five things to watch in April


April 3, 2018
Subject | Institutional | Invesco | Macro views

The first quarter of the year has ended with major developed market indices down slightly and major emerging market indices up slightly. But those numbers belie a very turbulent period in which stocks were whipsawed. Bonds also experienced gyrations, with the yield on the 10-year U.S. Treasury moving from 2.41% at the start of the quarter to a peak of 2.94% and ending at 2.74%.1 As we begin the second quarter, there are five critical things to watch.

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Investing in emerging markets: Multinationals vs. local


March 29, 2018
Subject | Active management | Institutional | Trimark

I am often asked why an investor should invest in local businesses in emerging markets instead of putting their money in large multinational companies. For example, why invest in Amorepacific Corp., a Korean cosmetics company, over Revlon, a multinational that derives a portion of its revenue from sales in emerging markets? This is a fair question, and as a long-term global investor, I will outline my thoughts on it in this blog post.

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Why truly active managers aren’t afraid of rising rates

With interest rates starting to rise, many investors are wondering what impact, if any, the move upward might have on their portfolios. We asked Marina Pomerantz, a portfolio manager on the Trimark Global Equities team and Neeraj Khosla, an investment analyst covering emerging-market (EM) equities for the same team, for their views on the current interest-rate environment.

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The Fed stays the course under its new leader

The Federal Reserve (Fed) raised interest rates by a quarter of a percentage point as expected on Wednesday and signaled two more rate hikes for 2018. It also released its Summary of Economic Projections (SEP) for the next few years, which suggests that the Fed is optimistic regarding the future performance of the U.S. economy.

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Four risks to watch in 2018

Our market outlook is positive, but institutional investors need to be ready for disruption

My base case for 2018 is that global growth will be solid and accelerating while global inflation will be low and benign. While I expect central banks around the world to tighten financial conditions, I believe the pace will be slow enough that overall financial conditions should remain accommodative. If my positive expectations for global growth, inflation and financial conditions come to pass, then the environment should be supportive of all risky assets in 2018, including credit and equity. However, we can’t ignore the potential risks to these conditions.

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Good news is bad news: Deconstructing the market sell-off


February 13, 2018
Subject | Institutional | Invesco | Macro views

Stocks globally have experienced more than a week of tumultuous trading, with the U.S. stock market officially in correction territory. And after being relatively sedate for years, the VIX Index has risen dramatically in recent days, indicating rising volatility. Stocks have moved so far so fast that investors have experienced financial whiplash and are trying to understand what caused markets to change course so abruptly. To put it simply, almost everything that should be a positive for stocks is now a negative for stocks.

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Above-trend growth could cause U.S. inflation later in 2018

Employment growth has been strong enough that the Bank of Canada (BOC) hiked its overnight target rate to 1.25% in January.1 The BOC statement attempted to balance the view that growth was near capacity with concerns that raising rates too quickly could cause the economic expansion to stall. The 10-year yield has broken through its previous peak of 2.15% on the growth story and a modest pickup in inflation.2 We believe yields should continue to move higher from these levels.

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What does market volatility mean for fixed income?

Market expectations of inflation have risen in recent days, after signs of wage growth – often seen as a harbinger of inflation – appeared in the January jobs report. We at Invesco Fixed Income believe investor concerns that inflation is finally showing signs of life have helped drive interest rates higher and impacted credit markets, where worries over higher interest rates (and their potential impact on companies) have caused declines in stock markets and other risky assets.1

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Is the world shifting from connection to economic protection?


January 30, 2018
Subject | Institutional | Invesco | Macro views

Last week offered some stark reminders that we live in a very global and interconnected world. Given how interwoven our international relationships have become, the current trend toward de-globalization carries with it many consequences — and protectionism could become the biggest economic risk of them all.

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Getting a read on the Goldilocks economy


January 9, 2018
Subject | Institutional | Invesco | Macro views

Last week saw the release of the latest U.S. employment report, with just 148,000 nonfarm payrolls created in December.1 This was significantly below expectations and the previous month’s reading. However, it may have been a Goldilocks jobs report: It is good enough to stave off any concerns that the economy may be weakening, but it’s not strong enough to suggest that the economy is overheating.

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Ten expectations for 2018


January 3, 2018
Subject | Institutional | Invesco | Macro views

Last year was a strong one for capital markets. Most countries’ stock markets posted positive returns, with many markets, including the U.S., posting double-digit gains. Globally, and in the U.S., the best-performing sector was technology. Energy was the worst-performing sector globally – and was one of the worst-performing sectors in the U.S.1

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Who’ll be watching the punch bowl in 2018?


December 19, 2017
Subject | Institutional | Invesco | Macro views | Trimark

Last week saw a confluence of central bank meetings and decisions over the course of two days. They revealed central banks that are in the process of – or on the verge of – tightening. I was reminded of former Federal Reserve (Fed) Chair William McChesney Martin, who said the central task of his job was “to take away the punch bowl just when the party gets going.” But is the party really just getting going – or is it getting long in the tooth? And, most importantly, who is the chaperone? And how strict are they?

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Bitcoin: Digital currency or digital tulip?


December 12, 2017
Subject | Commodities | Institutional | Invesco | Macro views

Now, for the first time, investors are able to purchase futures on bitcoin, the digital currency. The Chicago Board Options Exchange just began offering derivatives contracts which provide the ability to bet on the future price of this cryptocurrency. The CME Group will also be offering derivatives contracts on bitcoin in the coming week. Investors seem to be excited about this opportunity, sending the price of a single bitcoin thousands of dollars higher in the past several weeks in anticipation of the launch of these futures contracts.

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2018 Investment Outlook: Taking tally of the global rally

As we look ahead to 2018, it’s important to first recognize how significant 2017 has been for international markets. This is the eighth year of a global bull market, but prior to 2017, international markets had trailed the U.S. for four consecutive years – and for six of the last seven years.1

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2018 Investment Outlook: Balancing cyclical and structural influences in multi-asset investing

Despite what has been an incredibly tumultuous, unpredictable and at times unimaginable period for global politics and an initially spluttering return to global growth, central banks appear to have successfully steered markets through the worst, ironing out the kinks and at times acting together to present a semblance of global harmony. Sometimes, markets have appeared to simply ignore events that in less interesting times would have caused a rout. Somehow though, it still doesn’t feel that the aftermath of the financial crisis is fully behind us, nearly 10 years on, and we believe it is vital to consider both cyclical and structural forces in building our economic and market outlook.

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2018 Investment Outlook: Emerging markets can extend their winning ways in 2018

Drawing support from an improvement in fundamentals at both a macro and corporate level, emerging equity markets significantly outperformed their peers in the developed world in 2017.1 Going forward, we expect this positive environment – favourable economic prospects, a pickup in global trade activity, sluggish inflation and competitive currencies – to provide an attractive landscape in which companies could prosper. With a supportive global macro backdrop, we are confident that companies can build on the generally stronger performances witnessed in 2017 and continue to deliver on the earnings front in 2018.

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2018 Investment Outlook: Meeting the diversification challenge

When traditional asset classes move in tandem, building a diversified portfolio presents a challenge. Duy Nguyen, Portfolio Manager and CIO, Invesco Global Solutions Development & Implementation Team, explains how he will approach portfolio construction in 2018.

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