The British philosopher Bertrand Russell once said, “What men want is not knowledge but certainty.” I have been thinking a lot about that quote in the last several weeks, and how especially in such uncertain times, certainty may be more helpful than knowledge in allowing us to move forward.
Comments Off on Markets gain increased certainty on key issues
Well, last week was in fact a Pepto Bismol kind of week, just as I had expected. No fiscal stimulus in the U.S., COVID-19 cases on the rise in Europe and the U.S., and growing concerns about the U.S. presidential election. It’s no wonder that the VIX volatility index has risen dramatically in the last few weeks, from 25 on Oct. 9 to 38 on Oct. 30.1 As I’ve said before, today’s election concerns aren’t your usual run-of-the-mill worries like we saw in past election cycles. Past questions focused on issues such as “What happens to stocks if corporate taxes go up?” This time around, it is “What happens if there is a contested election?” and “What happens if there is civil unrest?”
Comments Off on Fears of unrest rise on the eve of U.S. Election Day
I am lucky enough to have developed a network of friends despite being a working mom. Some of these friends go back to childhood and high school, some are moms I have met through my children’s schools, and some are friends I have met in the workplace. They have provided a wonderful web of support throughout the chaos that can be child-rearing and everyday life. I have joked with them about particularly bad days — like a parent-teacher conference that we expected to go awry — as being “Pepto-Bismol” days, referring to the medicine used to combat upset stomach (an unfortunate symptom of many a crazy day).
Well, I feel some serious Pepto-Bismol days coming on, given the impending U.S. presidential election, the declining possibility of another U.S. fiscal stimulus package in 2020, and rising COVID-19 infection rates around the world.
Comments Off on Stay prepared for a volatile autumn
This month, I’m watching five key issues that have the potential to impact global markets.
Comments Off on Five things to watch in October
There is a feeling of apprehension in markets. I can sense it in the questions I receive. I continue to get more run-of-the-mill queries such as: “Are stocks still overvalued at current levels?” But then there are the new questions, which reflect deeper concerns. Most of the election-related questions I have received are like none I have gotten before in my career.
Comments Off on Five questions we’re hearing from investors
It’s back to school season, and that invariably reminds me of my own education and all that I enjoyed learning when I was in school. One class that I found particularly thought-provoking was a business school class on the history of entrepreneurship. Interestingly, the curriculum started with Joseph Schumpeter, the economist who introduced the concept of “creative destruction,” which Schumpeter developed based on the theories of Karl Marx. Not surprisingly, I have thought a lot about Schumpeter’s views throughout the pandemic.
Comments Off on What will arise from today’s ‘creative destruction’?
It feels like investors have been on a wild ride over the past week as tech stocks plunged, dragging down major global indexes with them. A few factors contributed to the fall: The first was Senator Mitch McConnell’s comments that a U.S. fiscal stimulus deal may not come to fruition in the next few weeks. Then, concerns rose about the potential for a contested election in the U.S. presidential race if no clear winner is declared on election night. Add to that concerns about frothy valuations in the tech space — the result was a very substantial sell-off for tech stocks with reverberations in global markets.
Comments Off on Three reasons why this isn’t another ‘tech bubble’
Last week brought some major headlines with a new inflation target policy from the Federal Reserve, news of a leadership change in Japan, a decline in US consumer sentiment, and spikes in COVID-19 cases. What are the implications of these events for investors?
Comments Off on What could the Fed’s new policy mean for investors?
It’s August in New England for the Hooper family, which means hot summer days, barbecues, and lots of time in the water. Every year at this time, my thoughts turn to the iconic movie “Jaws,” which, as regular readers of this blog may remember, is another summer tradition for me. The book came out when I was still a toddler, and the movie soon after, so I must confess that I have never felt comfortable swimming in an ocean in my entire life. In fact, I recall reading the book as a child in the car as we drove from New York to Florida for a beach vacation — and declaring after a particularly frightening chapter that I was ready to turn around and go home.
Comments Off on Staying on guard against overconfidence
Last week, I laid out five things to watch in the month of August. Over the past seven days, we’ve seen new developments in each one. This week, I offer a quick update to each of those five issues, and then highlight positive news for U.S. jobless claims and vaccine development.
Comments Off on Optimism persists despite U.S. stimulus stalemate
We are officially in the “dog days of summer” (in the Northern Hemisphere, anyway). This nickname comes from the rising of Sirius (the “Dog Star”), but it has become synonymous with the uncomfortable heat of late summer. Technically, the “dog days” end on August 11, but most people apply the term to the entire month. This week, I look at five issues that I expect to impact markets throughout the sweltering “dog days” and beyond.
Comments Off on Five things to watch in August
Last Friday, my oldest child graduated from high school. Late July is not normally associated with graduations, but we are living in a time of COVID, and so what was supposed to occur two months earlier in the New York area was postponed and rescheduled. We were incredibly grateful to our son’s high school for putting on five separate graduation ceremonies in the course of a day to comply with New York State regulations that allow a maximum of 150 people to attend gatherings. Given the need to fit in five ceremonies in one day, the event felt like one part important milestone and one part fast food drive thru — which made it the first high school graduation I ever attended that was efficiently run and ended before you actually started wishing it could end. I was struck by the commencement speaker and his very honest words to the graduates. He told them that he couldn’t imagine having to miss out on the many important senior-year milestones that the class of 2020 missed because of the pandemic. He told them that this year has created a wound that will take years to heal.
Comments Off on The pressure is growing for the U.S. economy
When I was in high school, we read Henry James’ “The Europeans” in our English Literature class. A major theme in the novel is the contrast between Europeans and Americans, with Americans in the “New World” somewhat ironically portrayed as conservative, traditional and more focused on money, while Europeans are portrayed as less traditional, more progressive and more emotional. I have thought about that book a lot in the past week.
Comments Off on EU passes stimulus package while U.S. lawmakers continue to negotiate
As coronavirus cases grow in the U.S., more fiscal stimulus appears to be on the way, which I believe is movement in the right direction. Ultimately, I expect the U.S. to fall into a pattern where, every month or two, Congress must pass a new stimulus package to keep the economy going, especially if the curve is not successfully bent.
Comments Off on As U.S. virus cases grow, so does the case for ‘big government’
Last week, we saw increases in both the Chinese and U.S. stock markets. But that’s where the similarities end — there is currently a meaningful difference in market confidence for the prospects for longer-term economic recovery.
Comments Off on Expectations diverge for economic recovery in the US and China
Invesco’s investment experts discuss the pandemic’s ripple effects in these markets
Comments Off on COVID-19 raises new questions in emerging markets, fixed income and ESG
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.
Comments Off on How long can economic data improve while infections continue to spread?
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.
Comments Off on Mid-year outlook: A slow, uneven economic recovery in the second half
