Invesco Canada blog

Insights, commentary and investing expertise

Is global trade entering an era of ‘vigilante protectionism’?


December 11, 2019
Subject | Institutional | Macro views

I grew up in the New York City area in the 1980s. My dad always read the tabloids, and so I started to do so as well. That’s where I first learned about a fascinating phenomenon – the Guardian Angels. This was a large group of concerned citizens who wore distinctive uniforms, most notably red berets, and patrolled subways and other public areas in an attempt to prevent crimes from occurring during what was perceived to be a lawless time for New York City. In the beginning, the Guardian Angels were labeled by the tabloids as “vigilantes” who were “taking the law into their own hands.” Today, they are a reminder of how chaotic New York City was at that time.

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2020 Global Outlook: The late cycle expansion continues


December 5, 2019
Subject | Macro views

As we approach the longest historical economic expansion in North America, we see the cycle continuing with no recession on the horizon. Twenty different global central banks eased monetary policy in 2019 providing fuel for global growth to continue. As U.S.-China trade tensions calm and a resolution to a three-year Brexit standoff is in sight, we believe business sentiment should improve and abundant central bank liquidity can help provide positive yet uneven global growth.

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2020 outlook: An optimistic view of capital markets


December 3, 2019
Subject | Institutional | Macro views

Welcome to December – just one more month until a new year begins (and, depending on how you do the math, a new decade as well). Naturally, this is the time when market-watchers issue their forecasts for what may lie ahead, and my team is no exception. Simply put, we expect continued monetary policy accommodation with little fiscal stimulus. Therefore, we are more optimistic about capital markets than we are about the overall economy, and we favor risk assets over non-risk assets for 2020. Below, I highlight some of the reasons why. An in-depth analysis is available here.

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Amid a host of central bank developments, one constant remains: global market pressure


November 26, 2019
Subject | Institutional | Macro views

Last week brought a number of key developments from central banks around the world, from the release of the Federal Reserve’s (Fed) latest meeting minutes, to a reaffirmation of the Bank of Canada’s (BOC) monetary policy, to the first speech from European Central Bank (ECB) President Christine Lagarde. These underscored the key differences between each central bank, but I see one constant: the continued pressure imposed by trade war tensions and a slowing global growth outlook.

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Our new study shows factor investing adoption continues to increase globally

Invesco’s Office of Global Factor Investing believes that systematic, evidence-based application of investment factors is part of a permanent trend as these strategies can complement other approaches in achieving client objectives. The most common client journey starts with factor investing in equities before moving into other asset classes; however, adoption is often client-specific.

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Global real estate: A generally positive outlook, but balancing growth opportunities with risk mitigation is key

Economic growth has begun to moderate worldwide, as expected, but remains adequate to support real estate demand. Heading into 2020, real estate appears more attractively priced relative to other asset classes than it did in early 2019 amidst even lower long-term government bond rates, which in turn may drive additional capital into the sector as investors widen their search for yield-bearing assets. While some risks have begun to recede (namely, upward pressures on inflation and interest rates), other geopolitical risks have crystalized to such a degree that our execution strategies have evolved to mitigate against them.

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International equities: Subdued expectations may lead to positive surprises

As 2019 draws to a close, the year has seen a welcome rebound for global equities after the sharp sell-off seen in late 2018. This rally has occurred despite weakening indicators so a key question facing investors is whether stabilization in growth/activity is now close at hand.

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emerging markets, economy

What could the upcoming U.K. election mean for Brexit?


November 19, 2019
Subject | Macro views

On Dec. 12, the U.K. is holding a general election, and the outcome is difficult to gauge. While the Conservative and Labour parties try to broaden the debate, the dominant theme remains Brexit. To give us a preview of this important election, I’m turning over today’s Weekly Market Compass blog to my colleague Paul Jackson. Paul is based in our London office and has been tracking the election news and polls closely.

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Bank of Canada downgrades economic outlook


October 30, 2019
Subject | Macro views

The Bank of Canada held the overnight rate at 1.75% at today’s meeting. While the result was widely expected, the tone of the statement, as well as the press conference, were more downbeat than anticipated.

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Will this week’s data confirm last week’s optimism for stocks?


October 29, 2019
Subject | Macro views

Last week was a “risk on” week for the markets, with stocks rising. The MSCI All Country World Index rose during the course of the week, the S&P 500 Index came close to its all-time high, and the tech-heavy Nasdaq Composite Index surged a robust 1.9%.1 U.S. Treasury yields also rose as fear dissipated – the 10-year Treasury yield rose to 1.8% and the 30-year finished at 2.29%.1 By the end of last week, there was a relatively comfortable 18-point spread between the 2-year and the 10-year Treasury yield.1

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Should investors be scared of a Halloween sell-off?


October 22, 2019
Subject | Macro views

Many people around the world observe Halloween in the month of October, celebrating all that is spooky and macabre. My kids have all been enthralled with Halloween, choosing their costumes several months in advance (one year, my older son insisted on wearing his costume every single day of the month of October). And plenty of adults who have outgrown trick-or-treat still believe that October would not be complete without horror movies running non-stop throughout the month. But no matter if you celebrate with cute kids’ costumes or elaborate haunted houses – what makes Halloween fun is the knowledge that the scares aren’t real.

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Is long-term Canadian equity underperformance coming to an end?


October 10, 2019
Subject | Macro views

The investing world is understandably focused on the U.S. After all, it’s the biggest economy, has the largest stock market, is home to the some of the best-known companies and, admittedly, the political spectacle in Washington can be entertaining at times. As a result, the U.S. frequently steals the limelight from its neighbor to the north.

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European Central Bank

Past presidential turmoil didn’t keep stocks down for long


October 8, 2019
Subject | Macro views

On Saturday evening, Oct. 20, 1973, U.S. President Richard Nixon ordered Attorney General Elliot Richardson, Deputy Attorney General William Ruckelhaus, and Solicitor General Robert Bork to fire independent special prosecutor Archibald Cox, resulting in the resignations of Richardson and Ruckelhaus and the dismissal of Cox. In the month after this so-called “Saturday Night Massacre,” the U.S. equity market, as represented by the S&P 500 Index, fell by more than 10%.1 By the time Nixon resigned almost a year later, U.S. equities had fallen by 26%, and ultimately by 39% at the trough.1

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News versus noise: Assessing the market impact of three major headlines


September 30, 2019
Subject | Macro views

One of the key themes I have been discussing in the last several years is geopolitical disruption – and we got a heavy dose of it last week. However, one of my main points over the past few years is that investors should try to identify the geopolitical disruption that really matters for the economy and markets, and ignore the events that are just background noise (most fall into this category, in my view). In particular, issues that can increase economic policy uncertainty are what we need to be sensitive to, as they can have significant consequences for economies and markets. Below, I assess today’s three major headlines and where they fall on the spectrum of “news versus noise” in relation to their potential longer-term impact on the markets.

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Can you reduce risk without raising your bond allocation?


September 24, 2019
Subject | Macro views

Many investors may be facing a catch-22 situation in their portfolios. Recent strong returns in the global bond market may have pushed their fixed income weighting beyond their strategic allocation. But the return of equity market volatility may leave them wary of re-allocating their bond gains into stocks.

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Markets shake off a series of unusual events


September 23, 2019
Subject | Macro views

I am the mother of three, including a 13-year-old girl and a 12-year-old boy. Like many American children their age, they spent the last several months obsessed with an urban myth surrounding Area 51. Many conspiracy theorists believe that Area 51, a secretive Air Force base in Nevada, is being used by the U.S. military to house aliens. One creative guy thought it would be funny to start an online movement to storm Area 51 this past weekend. What began as a joke gathered steam quickly, and 2 million people signed up to force entry into Area 51. That huge response created great excitement and anticipation about what the event would bring.

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Fed cut meets market expectations, but future cuts are in doubt


September 20, 2019
Subject | Invesco | Macro views

The U.S. Federal Reserve (Fed) cut interest rates by 25 basis points Wednesday to a range between 1.75% and 2%, as widely expected by markets. However, the Fed’s economic projections showed that the median Federal Open Market Committee (FOMC) member does not expect to cut rates again this year, marking potential disagreement among FOMC members and with markets; the bond market is currently pricing an additional rate cut this year and some FOMC members have expressed interest in future cuts.

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