Invesco Canada blog

Insights, commentary and investing expertise

How long can economic data improve while infections continue to spread?

The U.S. jobs report and Purchasing Managers’ Index data both improved in June, but rising infections remain a critical concern. I would not be surprised to see those numbers slip back in the coming months if policymakers become complacent. In my view, more fiscal stimulus is clearly needed as some companies continue to announce layoffs and file for bankruptcies while others are voluntarily re-closing stores.

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Mid-year outlook: A slow, uneven economic recovery in the second half

The first half of 2020 has been unexpected, to say the very least. Our outlook for the year quickly became obsolete with the rapid spread of COVID-19 and accompanying lockdowns across the globe, which have stymied economic activity and caused an unprecedented destruction of demand.

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Economic data shows improvement, but infection rates prove difficult to control

Two weeks ago, I wrote about some burgeoning “green shoots” that offered early, encouraging signs of economic recovery around the world. I’m pleased to see that more green shoots are sprouting – we continue to receive positive economic news as developed world economies progress in their re-openings. However, I’m also keeping an eye on some negative signs that could cause disruption.

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Five key takeaways from the Fed’s press conference


June 15, 2020
Subject | Institutional | Macro views

Last week saw a massive sell-off for stocks globally. The initial trigger seems to have come from U.S. Federal Reserve Chair Jay Powell’s press conference following the June 9-10 meeting of the Federal Open Market Committee (FOMC). Below, I summarize five key points from that press conference and the key takeaways I heard while “reading between the lines.”

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Burgeoning ‘green shoots’ bring hope for an economic recovery

The last time I used the term “green shoots” was the late spring and summer of 2009. Like everybody else, I was looking for signs of economic life after the global financial crisis and searching for indications that the U.S. and other developed countries were rising out of the economic ashes like a phoenix. And now, 11 years later, I find myself again looking for – and finding – encouraging signs of recovery in the U.S. and other major developed countries. In this week’s blog, I focus on some of the green shoots that I’ve seen in the last several weeks.

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Nations pledge trillions in fiscal stimulus to boost their economies

Last week I wrote about the need for more fiscal stimulus in order to counteract the negative economic impact of the pandemic. Since the start of this crisis, I have worried that countries would follow the same playbook that was used in the face of the Global Financial Crisis – in general, a large level of monetary stimulus with a far smaller level of fiscal stimulus. I’m happy to report that the European Union (EU), Japan, and China all announced more fiscal stimulus in the past several weeks.

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A case study in lowering unemployment: The Work Projects Administration

Unemployment rates for many countries are sky high and likely to remain high for some time. In response to the pandemic, many developed countries’ central banks have showered accommodative monetary policy on their respective economies. However, if history is a guide, that is unlikely to have a major impact on lowering unemployment. Instead, fiscal policy can be more impactful on unemployment because it is more direct. As governments around the world debate the next steps of their policy response, this is perhaps a valuable time to examine a case study in reducing unemployment through fiscal spending.

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Portfolio managers examine the impact of COVID-19

As the number of COVID-19 cases continues to rise, so do unemployment rates. And so the world continues to look for balance between implementing public health measures, offering fiscal and monetary stimulus, and opening up economies.

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Low-wage job losses fuel the U.S. stimulus debate

As expected, the U.S. Employment Situation Report for April was abysmal. Unemployment rose dramatically as pandemic lockdown measures were implemented across the U.S., with hospitality and leisure posting the biggest job losses. Amidst all the terrible data, there was one obvious and glaring takeaway: Job losses were concentrated among low-wage workers. In fact, so many lower-paying jobs were lost that wage growth rose markedly, underscoring how hard hit lower-income workers have been by this pandemic.

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Global Markets: What to watch for in May

One month ago in this blog, I noted that April would be a critical month to gauge the global response to the COVID-19 pandemic. Across the board, it was a massive response, including significant monetary and fiscal stimulus from a variety of economies and widespread lockdowns designed to slow the rate of infection. But as we enter May, we are seeing differences in approach come to the fore – between countries, between localities, and between political parties.

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As the U.S. passes more stimulus, disagreements loom on what comes next

For months, I have talked about the importance of policy in combatting the COVID 19 crisis: health policy, monetary policy, and fiscal policy. All three prongs need to be adequate and effective in order for the US economy to recovery quickly. While the Federal Reserve has bent over backwards to provide accommodation to support the US economy and markets, fiscal stimulus is still a work in progress.
 
In this week’s commentary I talk with Andy Blocker, Invesco’s Head of US Government Affairs, who breaks down where we are today in terms of fiscal policy – and what to expect next.

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Tracking China’s recovery and a dire U.S. earnings season

Last week was another momentous one for economies and markets, with particular attention being paid to the economic recovery in China, earnings season for U.S. stocks, and the Federal Reserve’s views on interest rates. Below, my colleagues from the Global Market Strategy Office and I answer some of the most pressing questions we have received from clients in recent days:

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As earnings season looms, portfolio managers look for long-term opportunity

Earnings season is heating up in earnest, giving investors a clear glimpse into the economic impact of the global lockdowns designed to slow the spread of the coronavirus. While investors brace themselves for bleak business results, we are so glad to see that these lockdowns appear to be working as intended from a public health perspective – many countries show evidence of “flattening the curve” of infections and fatalities. This is leading to the inevitable conversations of how best to re-open economies – a task that will require caution so as not to overwhelm health care resources with a second wave of infections.
 
With all of this as background, our portfolio managers continue to look for ways to guard against the looming risks and to position themselves to find opportunities in the recovery – no matter what path that might take. In this blog, I highlight the perspectives of four Invesco investment experts:

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Six things for investors to watch in April

In the early stages of the COVID-19 pandemic, we talked about the need for an effective, global, three-pronged approach in order to achieve a “best-case scenario” outcome: 1) an appropriate health policy response to “flatten the curve” and control the spread of the virus; 2) an adequate monetary policy response to support financial markets and the economy; and 3) an adequate fiscal policy response to help soften the economic blow to households and businesses. We saw effective approaches, in different forms, in both China and South Korea. Now we are looking to other policymakers to provide effective strategies as the novel coronavirus spreads.

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Where do portfolio managers see opportunities in today’s environment?

The three-pronged fight against COVID-19 and its economic impact continues. Central banks are providing monetary policy support to keep banks and markets functioning, national governments are providing fiscal policy support to consumers and businesses, and governments at all levels are taking public health policy steps to contain the spread of the virus. (Not to mention the tireless dedication of the health care workers on the front lines and the scientists searching for treatments and vaccines.)

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Where do stocks and bonds go from here?

In last week’s blog, members of Invesco’s Global Market Strategy (GMS) team in Hong Kong, Italy, London, Tokyo and New York shared their on-the-ground insights of the fight against coronavirus from a health care, monetary, and fiscal perspective. Today, we take a deeper dive into the potential implications of the pandemic on U.S. stocks and bonds, as well as the GMS team’s view of asset allocation considerations.

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Coronavirus impact and response: A global view

Every morning, my day begins by discussing the latest developments in the coronavirus fight with my team of strategists on-the-ground in Hong Kong, Italy, London, Tokyo, New York and elsewhere. Today, my weekly blog features several members of Invesco’s Global Market Strategy Office, who answer the most pressing questions they’ve been hearing from investors who are concerned about COVID-19 and its impact on the global economy.

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Could the surge in market volatility signal the end of the current market cycle?


March 10, 2020
Subject | Coronavirus impact | Macro views

Last Friday, Russia surprised markets by refusing to the production cuts the rest of OPEC+ supported – cuts that were needed to stabilize oil prices in the face of the coronavirus-related hit to global demand. Saudi Arabia responded over the weekend by announcing an actual increase in oil production. This comes on the heels of an announcement by Italy effectively shutting down much of northern Italy.

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