Invesco Canada blog

Insights, commentary and investing expertise

Stock losses snowball across the globe in a December sell-off


December 6, 2018
Subject | Institutional | Invesco | Macro views

U.S. stocks began a dramatic sell-off on Tuesday that has continued and spread to other parts of the world, creating intense headlines across the globe on Thursday. There has been a flight to the perceived safety of sovereign debt. The yield on the 10-year U.S. Treasury fell dramatically, from more than 3% at the start of the week to 2.83% as of this writing1 – and other major sovereign debt yields also followed suit. Some areas of the yield curve inverted, and the 2-year/10-year yield curve is in danger of inverting.

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Could December be the start of a “Santa Pause” rally for stocks?


December 4, 2018
Subject | Invesco | Macro views

When I was in high school, I worked as a lifeguard. I loved the job, but I was always aware of the enormous responsibility that came with it. I found the key to success was to anticipate trouble before it happened – to watch swimmers for any early signs of distress before they ever came close to drowning. Today, I see similarities between lifeguards and policy-makers such as the U.S. Federal Reserve (Fed), which must try to anticipate economic downturns before they start. For the past several weeks, I have written in my blog that signs of a global slowdown are starting to appear. The good news is that policy-makers appear to be reacting to those early signs – which I believe could help spur a “Santa Pause” rally for markets.

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Want to build smart cities? Then we need a new infrastructure financing model


November 30, 2018
Subject | Industry views | Institutional | Invesco | Macro views

What comes to mind when you hear the term “smart city”? It might be a clean and safe space where people and places are connected by digital technology. Or a place where self-driving cars take us around and pollution is a thing of the past. We all have a vision of what a smart city should be – but for most of us what we imagine is far removed from the cities we actually inhabit, with clogged roads, smoggy days, and outdated infrastructure.

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Central banks to the rescue? Don’t count on it.


November 27, 2018
Subject | Invesco | Macro views

Stocks continued to slide last week, and most major indices are negative for the year-to-date period – some having posted double-digit losses. As I noted in my commentary last week, there are hints of an economic slowdown appearing. In this environment, expectations are increasing that central banks may loosen their monetary policy in response, but I’m not sure that central banks will come to the rescue this time. In fact, I believe central banks are more likely to be a risk factor going forward.

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Amid concerns of a global slowdown, Fed looks likely to act


November 20, 2018
Subject | Industry views | Macro views

This past weekend, I had the opportunity to see a production of Macbeth. Though I’ve heard the words many times before, I was particularly fixated by a verse from one of the witches: “By the pricking of my thumbs, something wicked this way comes.” The “pricking of thumbs” was originally intended to represent the historic belief that people could sense when evil was approaching. However, I couldn’t help but think this was a timely analogy for the sensations some market participants are feeling that an economic slowdown is approaching.

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Despite lower GDP growth, European earnings may accelerate in 2019


November 16, 2018
Subject | Invesco | Macro views

For months, Europe has grappled with geopolitical uncertainty in the form of ongoing Brexit negotiations (which face a looming March 2019 deadline) and Italy’s populist coalition government. In this environment, UK companies have appeared less likely to invest – which could lead to lower European growth levels next year.

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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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U.S.-China spat underscores value of investing in quality


November 9, 2018
Subject | Invesco | Macro views

There was news out last Friday that U.S. President Donald Trump has directed his cabinet to start crafting a new trade agreement with China.1 With my focus on emerging markets, this is welcome news, as the trade dispute between the world’s two largest economies has cast uncertainty over the markets.

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The U.S. midterm results are in, but what do they mean for markets?


November 7, 2018
Subject | Invesco | Macro views

Going into yesterday’s U.S. midterm elections, our base case scenario was that Democrats would take the House while Republicans would retain the Senate. That has come to fruition, and has had an initially supportive effect on markets, with U.S. stocks and bonds supported and the dollar weaker. This U.S. market response has in effect eased global financial conditions, supporting other currencies and financial markets in general, including emerging markets.

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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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The Rise of Robots


November 5, 2018
Subject | Industry views | Institutional | Invesco | Macro views

How the fourth industrial revolution will transform economics, politics, and more

After two centuries of industrial transformation and change, we’ve reached what many now call the Fourth Industrial Revolution. It’s marked not by the introduction of steam power or the advent of mass production but by the rise of artificial intelligence and automation that will fundamentally transform the global division of labour.

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BoC takes another step on the way to “neutral”


October 24, 2018
Subject | Macro views

The Bank of Canada (BoC) announced it hiked the overnight rate by 0.25% to 1.75% at today’s meeting. This is the third 0.25% hike by the BoC this year. As the economy continues to perform near its long-term potential, the BoC believes it will need to increase rates to a neutral level to achieve its inflation target of 1-3%. It currently estimates a neutral rate level to be in the range of 2.5%-3.0%.

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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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Five key takeaways from the IMF annual meeting


October 22, 2018
Subject | Invesco | Macro views

The International Monetary Fund (IMF) took a decidedly bearish tone during its annual meeting in Bali earlier this month – in fact, I would say it was the grimmest gathering of the IMF that I’ve ever seen. I had the opportunity to attend the talks in Indonesia, and I came home with five key takeaways. Below, I summarize those takeaways and share the viewpoint from Invesco’s Office of the Global Market Strategist.

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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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