Insights

Market Insights: Global Monthly Outlook - Global equity markets reached historic highs in November

Dec 21, 2017

In November, global equity markets reached historic highs amid solid corporate earnings   and synchronized global economic growth. US  tax reform prompted a rotation away from technology stocks into financial stocks.Chinese and Hong Kong equity markets were notable outperformers as investor sentiment was boosted by third quarter earnings growth.

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Why Asia has done well this year?

Dec 8, 2017 | Stuart Parks

2017 has seen Asian equity markets rally largely due to the strength of corporate earnings. At the start of the year, earnings growth expectations for 2017 were low at approximately 10%, but over the course of the year they have been revised up to 20%. The recovery has been helped by a combination of factors such as: solid global economic expansion, a lack of disruption from President Trump, falling bond yields in some Asian markets and a small earnings rerating.

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Balancing cyclical and structural influences in multi-asset investing

Dec 6, 2017 | David Millar

Despite what has been an incredibly tumultuous, unpredictable and at times unimaginable period for global politics and an initially spluttering return to global growth, central banks appear to have successfully steered markets through the worst, ironing out the kinks and at times acting together to present a semblance of global harmony. Sometimes, markets have appeared to simply ignore events that in less interesting times would have caused a rout. Somehow though, it still doesn’t feel that the aftermath of the financial crisis is fully behind us, nearly 10 years on, and we believe it is vital to consider both cyclical and structural forces in building our economic and market outlook.

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Why diversification may be coming back in style

When we think about our outlook for 2018, we look for themes that can help us reduce risk and boost return potential — and we’re always on the lookout for blind spots that can pose an unexpected threat. The foundation of our process is the development of capital market assumptions — long-term forecasts for the behavior of different asset classes. Our expectations for returns, volatility and correlation serve as guidelines for our long-term, strategic asset allocation decisions. 

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Adapting to the withdrawal of monetary stimulus

Bond markets have been in a sweet spot in recent years. Economic growth has been positive, inflation has been relatively benign, volatility and default rates have been low, central bank policy has been accommodative and the demand for income has been high. One of the biggest challenges we as fixed interest investors now face is what happens when one of the central pillars of this supportive environment — the still huge amount of central bank stimulus — is reduced.

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Global markets: 10 expectations for 2018

Dec 6, 2017 | Kristina Hooper

2017 was a positive year for the economy and capital markets. The global economy grew at a faster pace than in 2016, and risk assets also rose significantly. However, investors are wondering whether the current environment will continue through 2018. Following are my 10 key expectations for the new year:

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Can stability in the region extend Asia's outperformance?

Dec 1, 2017 | Mike Shiao

2017 has been a good year for Asian equities so far, rising 36% and outperforming the rest of the world.1 The strong performance has been supported by steady economic conditions and robust corporate earnings. Yet still, Asia is trading at its lowest price-to-book ratio relative to the S&P 500 Index in 15 years.2

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2018 growth may moderate, but reforms and innovation bode well for the longer term in China

Dec 1, 2017 | Mike Shiao


Chinese equities caught investors by surprise in 2017 with a strong rally. Contrary to the pessimism over the past few years, investors have turned upbeat toward China, and for good reason: Economic data in general exceeded expectations, and we have seen broad-based earnings growth.

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The synchronised economic expansion: How much further to run?

Dec 1, 2017 | Nick Mustoe

The global economy continues its synchronised recovery, as evidenced by robust data across regions. Indeed, all 45 countries tracked by the Organisation for Economic Co-operation are expected to post positive economic growth in 2017 for the first time in 10 years. Even more optimistically, 33 out of 45 countries are seeing accelerating growth. This has boosted international trade and commodity prices, and helped make the global expansion story gradually more self-sustaining. On this basis alone, the prospects for 2018 look positive, with broadbased improvements across the major developed economies and a number of emerging market economies expected to continue.

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Plenty of scope for active managers to add value

Dec 1, 2017 | Jeffrey Taylor

Europe is a rich, highly developed part of the world which is home to a vast range of companies. However, on occasion it still seems to struggle to attract attention from serious investors around the world. There’s always a handy excuse: “Why bother when it’s only a play on more interesting parts of the world?” or “There’s never any earnings growth, is there?” or “Don’t the politics make it un-investable?” Wrong.

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All signs point towards a sustained global expansion

Dec 1, 2017 | John Greenwood

We approach the new year with confidence that the world’s leading economies will continue to display strength and resilience. The US economy is likely to lead from the front, aided by a gathering upturn in the Eurozone and the start of a renewed upswing in global trade. The likely expansion among developed economies should also have a positive impact on the export-oriented, manufacturing economies of East Asia as well as commodity producers in other emerging nations.

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Asian Insights Q3 2017: Stable politics paving the way for important reforms

Aug 10, 2017 | Asian Investment team

Looking ahead, what will be the next catalysts for growth and increased earnings in Asia? We believe a stable political landscape and acceleration of reforms will be the key drivers for Asian markets.

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Stability is the key ahead of China's Communist Party Congress

Aug 1, 2017 | John Greenwood

China has adopted varying policies to maintain the economic momentum and keep everything stable ahead of the 19th National Congress of the Communist Party — sometimes tightening, sometimes easing.

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Economic Insights: Quarterly Economic Outlook July 2017

Jul 6, 2017 | John Greenwood

The Trump “reflation rally” that drove equity markets across the developed and emerging world in the four months after the US election has continued but it is more due to the underlying expansion of the US business cycle than to any Trump effect.

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Fed hikes interest rates despite soft inflation


UK voters deliver another election surprise


Market Insights: Global Monthly Outlook - Global markets embraced the first round of French presidential election (July 2017)

May 25, 2017

Markets globally responded positively to the first round of the French presidential election.With monetary policy on hold across the globe, past efforts of loose policies are feeding through to lift growth conditions.

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Market Insights: Global Monthly Outlook - Global markets embraced the first round of French presidential election (May 2017)

May 25, 2017

Markets globally responded positively to the first round of the French presidential election.With monetary policy on hold across the globe, past efforts of loose policies are feeding through to lift growth conditions.

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France: A market-friendly result which will help reduce the European risk premium

Apr 26, 2017 | Jeff Taylor

Market-friendly centrist reformer Emmanuel Macron will face far anti-European right-winger Marine Le Pen. Opinion polls have consistently pointed towards something like a 60-64%: 36-40% vote in Macron’s favour. A Macron presidency should also be a lot easier for the Germans to work with constructively.

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Market Insights: Dragon Code - China's e-commerce growth

Apr 9, 2017 | Mike Shiao

Donald Trump’s unexpected election win took investors by complete surprise.

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The UK triggers Brexit with Article 50. So what happens now?


Market Insights: Global Monthly Outlook - Favoring developed markets over emerging markets March 2017 (covering February 2017)

Mar 20, 2017

February saw global stocks climb to record peaks mid-month, setting a fresh record for the first time since 2015. With central banks expected to remain relatively accommodative, growth conditions should gradually improve.However, the uncertainty over policies and structural matters may keep markets somewhat volatile.

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Market Insights: Fed hikes short-term rates for third time in 15 months

Mar 15, 2017

The US Federal Reserve (the Fed) hiked its benchmark short-term interest rate by 25 basis points, as expected. The statement was generally neutral, in our view, with upbeat commentary around the current growth backdrop.

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Market Insights: Global Monthly Outlook - Global equities could benefit from expectations of policy stimulus January 2017 (covering December 2016)

Jan 24, 2017

Improving commodity prices and encouraging core economic data prints helped the MSCI AC World index to rally in December.

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Market Insights: 2017 Investment Outlook

Dec 15, 2016

This past year has been marked by a series of macro events that helped shape a dynamic, challenging market environment. The UK’s vote to withdraw from the European Union, oil price volatility, a contentious presidential election in the US and slowing growth in China all contributed to major market moves.

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Market Insights: Italian Referendum "No" vote suggests eurozone will muddle through

Dec 7, 2016 | Arnab Das

Italians voted Sunday, Dec. 4, to reject changes to their constitution, leading to the resignation of Prime Minister Matteo Renzi and marking a victory for the country’s populist movement. Polls had suggested that Italian voters would reject the referendum on constitutional amendments to reform the Senate by a margin of about 10%. The turnout at 70% and margin of victory at 18% were both higher than expected.

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Market Insights: A tale of two cities by Jeff Taylor

Dec 7, 2016 | Jeff Taylor

Two elections in one weekend are more than enough for any fund manager to cope with, the results coming out of Vienna and Rome being very different.

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Market Insights: Global Monthly Outlook - Growth conditions are overcoming the cyclical and structural challenges ahead November 2016 (covering October 2016)

Nov 21, 2016

October’s better thanexpected core economic growth data saw expectations for a December US interest rate hike firm-up among market participants.

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Market Insights: Global Monthly Outlook - Global equities are expected to face cyclical and structural challenges October 2016 (covering September 2016)

Oct 23, 2016

For the most part, market uncertainty about the path of global monetary policy dominated trading during the month.

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Market Insights: Global Monthly Outlook - Global government bonds poised to benefit from limited inflation risk September 2016 (covering August 2016)

Sep 25, 2016

Global equity markets rose in August as markets surprised investors having rallied strongly to reach new all-time highs on several occasions.

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Market Insights: Global Monthly Outlook - Global government bonds are expected to benefit from limited inflation risk August 2016 (covering July 2016)

Aug 30, 2016

Global equity markets for the most part rose in July, as markets participated in the post-EU Referendum equity rally. Investors’ risk-on sentiment was supported by the prospect of global central banks keeping interest rates lower for an extended period, encouraging core economic data releases and a more
confident view of the global economy.

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Market Insights: Global Monthly Outlook - Global government bonds are expected to benefit from limited inflation risk July 2016 (covering June 2016)

Jul 6, 2016

With markets completely wrong-footed by the decision of UK voters on 23 June to leave the European Union (EU), the immediate market reaction was extreme. In a classic risk-off move, equities around the world fell, and bond markets – particularly core government bond markets – went up, with yields for 10-year US Treasuries, German Bunds and UK Gilts experiencing historic lows.

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Market insights: EU referendum: Our thoughts as the UK decides to leave

Jun 23, 2016

Following the UK’s historic decision to leave the European Union (EU), we share the views from across our economic and investment teams as to how this result might shape their thinking and the investment landscape going forward.

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Market insights: Talking Points - Why we expect a China A-shares inclusion in the MSCI Emerging Markets index within the next two years

Jun 19, 2016

Given current market sentiment it is perhaps not surprising that MSCI erred on the side of caution and earlier in the week made the decision not to include China A-shares in its Emerging Markets index. However, we believe a small percentage of inclusion, such as 5%, is highly possible in the next year or two.

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Market Insights: Global Monthly Outlook - The global rally was in part supported by US June 2016 (covering May 2016)

Jun 14, 2016

In what appeared to be a recurring theme, gains on most developed equity markets for 2016 were erased by mid-May. However, equity markets did bounce back to pare losses – albeit barely – towards month end, and the MSCI World index turned positive year-todate.

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Market Insights: Global Monthly Outlook - Global equities advance at a slow pace May 2016 (covering April 2016)

May 19, 2016

Following a buoyant March, many market participants were bracing themselves for a sharp pullback in April. However, global equity markets in aggregate continued to advance at a slow pace, fuelled by a better-thanexpected corporate earnings season, some positive data coming out of China and higher commodity prices.

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Market Insights: Market views - Nick Mustoe CIO Invesco Perpetual April 2016

May 18, 2016

At the start of the year, the MSCI Asia ex-Japan index lost as much as 12.9%1 before rebounding to recoup those losses by the end of the first quarter. What drove markets lower were global investors’ fears about three issues: 1) the slowdown in China, 2) the potential repercussions of further US policy tightening and 3) rising deflationary pressures driven by weak commodity prices.

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Asian Insights: Reform remains the key for growth in Asia Q2 2016

May 18, 2016

At the start of the year, the MSCI Asia ex-Japan index lost as much as 12.9%1 before rebounding to recoup those losses by the end of the first quarter. What drove markets lower were global investors’ fears about three issues: 1) the slowdown in China, 2) the potential repercussions of further US policy tightening and 3) rising deflationary pressures driven by weak commodity prices.

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Global Insights: Countdown to MSCI China A-Share Inclusion

Whether or not MSCI adds China A-shares to the MSCI Emerging Markets index as part of their next round of updates in June, we believe that implementation of a gradual inclusion process is only a matter of time given China’s central role in the emerging markets.

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Investment Insights: Korea’s changing corporate landscape – leading to a healthier market

May 15, 2016

The Korean corporate landscape is gradually changing, with the emergence of more independent businesses, on the back of the diminishing importance of the ‘chaebols’. In our view, this is an important development for the Korean economy and market.

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Economic Insights: Why negative interest rates are not a solution for Japan or the eurozone

May 15, 2016 | John Greenwood

The Bank of Japan (BoJ) has now been conducting quantitative easing (QE) for just over three years, while the European Central Bank (ECB) has been conducting QE for just over one year.

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Market Insights: Global Monthly Outlook - Prefer developed markets over emerging markets April 2016 (covering March 2016)

Apr 29, 2016

Global equity markets regained a lot of ground in March, as investor confidence returned to the market. The new-found optimism came in the wake of further economic stimulus measures announced by the ECB, improving US economic data and some respite from the downward spiral that had plagued oil prices.

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Market Insights: Global Monthly Outlook - Positive on US equities - March 2016 (covering February 2016)

Mar 29, 2016

February was a month of two halves for global equity markets with many stocks posting another month of losses, despite a strong rally in the second half of the month.

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Market Insights: Global Monthly Outlook - Positive on the relative strength of the US economy February 2016 (covering January 2016)

Feb 24, 2016

Rekindled concerns over global growth and the state of China’s economy, coupled with the fresh lows seen in commodity prices, resulted in one of the worst results for global equity markets recorded in the month of January.

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Market Insights: Global Monthly Outlook - Developed market equities look more favorable - January 2016 (covering December 2015)

Jan 27, 2016

Global equity markets were mixed. In the US, equity markets ended the month lower. Eurozone indexes were the most volatile.

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Important information

Dec 30, 2015

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