Invesco Canada blog

Insights, commentary and investing expertise

Coronavirus knocked our 2020 outlook off track. But maybe not for long.


Global Market Strategist, North America
March 3, 2020

Subject | Coronavirus impact | Macro views

It wasn’t long ago that the ink was drying on our 2020 outlook. In it, we touted the conclusion of the third major policy-driven growth scare (along with 2012’s European debt crisis and 2015’s Federal Reserve [Fed] rate hike) of the elongated business and credit cycle. Stable growth and supportive policy were to be the theme of 2020. The Fed had already overturned the 2018 rate hikes and had successfully eased financial conditions, while the Trump administration had inked a Phase 1 trade deal with China. China, for its part, was working to stimulate its economy. The January reading of the Institute of Supply Management Manufacturing Purchasing Managers Index, as good of a leading indicator of economic activity as any other, would have traditionally been viewed by us as a resounding affirmation that the growth scare had passed. “Risk on!” we would have rejoiced.

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As markets struggle, where do global economies go from here?


Global Market Strategist, Invesco Ltd.
March 2, 2020

Subject | Coronavirus impact | Macro views

We have seen a rapid and dramatic market correction as a result of the news flow around the COVID-19 outbreak. This appears to be an overreaction, in my view – but I would not be surprised to see the sell-off continue as uncertainty remains high on key issues: ease of transmission, length of time a person can be infected and contagious without showing symptoms, mortality rates, and length of time before the infection rate stabilizes globally.

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Assessing the unknowns as coronavirus spreads


Chief Strategist and Head of Multi-Sector, Invesco Fixed Income
March 2, 2020

Subject | Coronavirus impact | Invesco Fixed Income (IFI)

Developments in the last week have made it clear that the spread of the COVID-19 coronavirus is unlikely to be contained and that it is something the world will likely have to deal with on an ongoing basis. Unfortunately, there are still many unknowns about the virus including how it spreads, what the fatality rate will prove to be, and whether scientists will be able to control it somewhat in the near future through improved treatment or a vaccine. This uncertainty is beginning to change people’s behaviour and is having an impact on the markets.
 
The spread of this virus is first of all a humanitarian issue, but for the balance of this note we will discuss the economic and market impact of the spread.

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The Evolution of ESG


February 27, 2020

Subject | ETFs | Industry views | Invesco

Responsible investing is becoming more mainstream as demand increases for strategies that incorporate ESG factors into their investment process. The drivers come from regulatory pressure, demographic shifts such as the growing influence of millennials, and the greater availability of corporate data on ESG issues. More generally, investors want their investments to align with their own values, especially if it offers the potential for better risk-adjusted performance.

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Recent data reveal the economic impact of coronavirus


Global Market Strategist, Invesco Ltd.
February 24, 2020

Subject | Coronavirus impact | Macro views

Last week both the S&P 500 and Nasdaq Composite indexes hit all-time highs mid-week before falling significantly at the end of the week on fears about the novel coronavirus (also known as COVID-19) impacting economic growth. Concerns about the contagion were amplified by the release of U.S. Purchasing Managers’ Index (PMI) flash data for February.1 The Composite PMI dropped to 49.6 – its first time in contraction territory since the 2013 government shutdown. Manufacturing PMI fell to 50.8 from 51.5 in January, with the coronavirus outbreak being blamed. Services PMI was especially hard hit (falling to 49.4 from 53.4) and is now technically in contraction territory.
 
As of today, Feb. 24, we are seeing a global sell-off in equities and a rush to “risk off” asset classes such as gold and U.S. Treasuries. Bond yields have dropped like a lead balloon on coronavirus fears. As of this writing, the 10-year U.S. Treasury yield is at its lowest level since 2016, and the 30-year is at its lowest level ever.2 The 10-year/3-month yield curve has inverted, and the 10-year/2-year yield curve is close to inverting. I have found that, historically, the 10-year U.S. Treasury yield has been a far better gauge of fear than the VIX – and the 10-year is telling us that there are serious concerns that this contagion will impact global growth.

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Challenges and opportunities within the ESG space


Equity Portfolio Manager
February 20, 2020

Subject | ETFs

As consumers, we’re more aware of the environmental and social impact of our consumption than ever before – and today, awareness has an impact on many people’s investment choices.
 
The growth and attention around ESG (Environmental, Social and Governance) investing within investment communities has progressed at a tremendous pace. In the U.S., ESG assets have grown 38% between 2016 and 2018,and 2019 appears to be no different. Yet as with many things that grow quickly, there can be growing pains, as well.
 
Today’s ESG investors face a few recurring challenges:

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