Invesco Canada blog

Insights, commentary and investing expertise

The pressure is growing for the U.S. economy


August 4, 2020
Subject | Macro views

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.

Continued

Leave a comment

The two-sided recovery: A conversation about the markets and economy

In the months since the initial coronavirus outbreak, we saw the economy and markets teeter on the brink of collapse, only to recover quickly. I recently sat down with my colleague and Investment Strategist, Talley Leger, to discuss the sustainability of this recent recovery.

Continued

Comments Off on The two-sided recovery: A conversation about the markets and economy

EU passes stimulus package while U.S. lawmakers continue to negotiate


July 27, 2020
Subject | Coronavirus impact | Macro views

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.

Continued

Comments Off on EU passes stimulus package while U.S. lawmakers continue to negotiate

Answers to pressing questions from investors


July 23, 2020
Subject | Macro views

We were joined recently by clients for a discussion about global investment opportunities, in the context of technically overbought conditions in US stocks. In this blog, we share our views regarding where we see risks and opportunities in international stocks.

Continued

Comments Off on Answers to pressing questions from investors

As U.S. virus cases grow, so does the case for ‘big government’


July 20, 2020
Subject | Institutional | Macro views

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.

Continued

Comments Off on As U.S. virus cases grow, so does the case for ‘big government’

Tactical Asset Allocation – July 2020


July 14, 2020
Subject | Active management | Macro views

Our macro regime framework continues to indicate the global economy is likely moving into a recovery regime, confirming our expectation of an inflection in the business cycle. By and large, recent global economic data releases have shown signs of stabilization as most economies have begun the reopening process. Over the past two months, indicators from consumer confidence to retail sales, business surveys and industrial orders suggest modest improvements off the bottom readings registered in April when the most stringent lockdown measures were in effect. The improvement in economic data is most apparent in Asia, particularly in China, where evidence of an economic recovery is emerging across several parts of the economy, such as housing, industrial orders and production, money and credit growth. Emerging markets outside of Asia are still lagging, reflecting the most recent contagion waves in Latin America and Russia (Figure 1).

Continued

Comments Off on Tactical Asset Allocation – July 2020

Expectations diverge for economic recovery in the US and China

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.

Continued

Comments Off on Expectations diverge for economic recovery in the US and China

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.

Continued

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

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.

Continued

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

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.

Continued

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

Near-term pullback, long-term uptrend

On March 13, 2020, we began talking1 and writing2 about a series of tactical market bottom indicators3 that showed signs of extreme risk-off positioning, which were positive from a contrarian perspective. One of those indicators was the Chicago Board Options Exchange (CBOE) equity put/call ratio. Little did we know it at the time, but ten days later, the S&P 500 Index would put in what now appears to be a major low for the cycle.

Continued

Comments Off on Near-term pullback, long-term uptrend

Answering your questions on inflation, equity allocation and gold

I recently presented a webinar detailing the three scenarios that the Invesco Investment Solutions team believes could unfold over the coming 12 to 15 months. We created three brief videos that outline our Base, Bear and Bull case scenarios that I discussed. The webinar included a Q&A session, but we were not able to get to all of the questions within our allotted time. I would like to answer some of them here.

Continued

Comments Off on Answering your questions on inflation, equity allocation and gold

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.”

Continued

Comments Off on Five key takeaways from the Fed’s press conference

Video: U-shaped recovery would be enough for bonds

The markets have been pretty vulnerable over the last few months, but they’ve started to settle down over the past month and a half. I believe a lot of the credit for this lies with incredible liquidity provided by central banks around the world.

Continued

Comments Off on Video: U-shaped recovery would be enough for bonds

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.

Continued

Comments Off on Burgeoning ‘green shoots’ bring hope for an economic recovery

Answering your questions on jobs, debt

I recently participated in a webinar for advisors and investors, Financial markets: Historical perspective and roadmap to recovery, followed by a brief Q&A session (you can watch a replay here). I’d like to take this opportunity to answer some of the questions we received but didn’t have time to address.

Continued

Comments Off on Answering your questions on jobs, debt

Portfolio positioning for a recovery scenario

In response to numerous client questions about portfolio positioning for a recovery scenario, we provide a historical perspective on stock market, sector, size, style and regional allocations. Also, we juxtapose typical recovery performance trends against recent price action.

Continued

Comments Off on Portfolio positioning for a recovery scenario

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.

Continued

Comments Off on A case study in lowering unemployment: The Work Projects Administration