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Posts From Invesco

The peaking of Eurozone inflation

The peaking of Eurozone inflation

🕔11:59, 6.Dec 2022

Unusually, inflation in the Eurozone is well above that of the US. We believe that two important factors, dollar and European gas price strength, are already fading. Hence, we think Eurozone inflation may have peaked and expect it to fall

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Risk & Reward – Third edition

Risk & Reward – Third edition

🕔10:23, 29.Nov 2022

While most investors are open to equity exposure in a low volatility market, they tend to shy away as volatility increases. To counteract equity volatility, asset managers have traditionally added perceived ‘safe haven’ assets like government bonds to the portfolio.

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The Big Picture 2023 Outlook

The Big Picture 2023 Outlook

🕔16:50, 28.Nov 2022

Given our view that 2023 will be a year of transition from a contraction regime to one of recovery, we reduce the defensiveness of our Model Asset Allocation, while keeping some powder dry for when recovery is confirmed. We are

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Where does inflation go from here?

Where does inflation go from here?

🕔14:48, 15.Nov 2022

Financial markets rebounded strongly after October’s US consumer price print surprised to the downside. We would not put too much emphasis on one month’s data and would await confirmation before sounding the all-clear. Nevertheless, we think inflation will remain an

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Bad news turning good

Bad news turning good

🕔11:40, 2.Nov 2022

Extracting a common thread from last week’s abundant information flows was impossible. Perhaps the critical item will be the weakness of the US economy revealed by detailed GDP data. Last week was rich in information. From UK and Chinese politics,

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Strategic Sector Selector

Strategic Sector Selector

🕔08:53, 24.Oct 2022

In the third quarter of 2022, global equities resumed their slide with no end in sight after a brief period of hope during the summer. Waiting for a recovery at the moment feels like waiting for Godot. Global central banks

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Where do we find value in Emerging Market equities?

Where do we find value in Emerging Market equities?

🕔15:34, 19.Oct 2022

Emerging market equity returns have been resilient year-to-date in the face of increasing uncertainty over the global economy and rising interest rates. The region remains our preferred choice in our model asset allocation, especially if inflation peaks, which we expect

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Seeking reasons to buy US equities

Seeking reasons to buy US equities

🕔13:05, 18.Oct 2022

After a 24% year-to-date decline in the S&P 500, we ask what could make us turn positive on equities. A 30% further decline would help but short of that, some combination of the start of recession, VIX above 40 and

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What happens when the dollar weakens?

What happens when the dollar weakens?

🕔12:31, 28.Sep 2022

We believe the US dollar is expensive and starting to run on empty. Looking ahead to when the dollar weakens, we expect it to provide a ceteris paribus boost to commodities, emerging market assets and …

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Economic Transition Monitor The path to net-zero

Economic Transition Monitor The path to net-zero

🕔10:26, 28.Sep 2022

This is the second edition of our regular monitoring of the path to net-zero. We continue to focus on the C20 – the 20 largest CO2 emitter countries (see Figure 1). These countries accounted for 80% of global CO2 emissions in 2021 and 18

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Where do we find value in Emerging Market equities?

Where do we find value in Emerging Market equities?

🕔08:07, 28.Sep 2022

Emerging market equity returns have been resilient year-to-date in the face of increasing uncertainty over the global economy and rising interest rates. The region remains our preferred choice in our model asset allocation, especially if inflation peaks, which we expect

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Global Asset Allocation 2022 Q4

Global Asset Allocation 2022 Q4

🕔10:25, 22.Sep 2022

Yields have again risen on all assets but we think this is largely compensating for greater policy/recession risk (we think we are in the contraction phase of the cycle). We boost cash to further Overweight, while reducing equities to further

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Is the bear market over?

Is the bear market over?

🕔14:12, 10.Aug 2022

After falling 23.6%, the S&P 500 has bounced 13%. Does that mean the bear market is over? History, suggests not, especially given that the Fed may now tighten even more aggressively, which I think raises the risk of recession. Viewed

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Does inflation travel?

Does inflation travel?

🕔10:15, 4.Aug 2022

Inflation has been a major driver behind financial market returns and we expect that to remain the case in the short term. Trade costs are a significant contributor to the final price of any good with shipping costs its most

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2022 Midyear Investment Outlook

2022 Midyear Investment Outlook

🕔08:03, 27.Jul 2022

Much of the world continues to move past the COVID-19 pandemic, but its remarkable effects on economies and policies remain top of mind as a new set of uncertainties enters the picture. Historic pandemic-era moves by both fiscal and monetary

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Cloudy with a chance of recession

Cloudy with a chance of recession

🕔10:57, 19.Jul 2022

The slump in global equities deepened in the second quarter of 2022 as concerns about a recession replaced fears of high inflation and an escalation of the war in Ukraine seemed less likely. The US Federal Reserve has maintained its

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Global debt review 2022

Global debt review 2022

🕔09:46, 12.Jul 2022

Global debt ratios declined in 2021 on the back of the rebound in GDP. Falling bond yields dampened the rise in debt service ratios over recent years but that is now changing. We fear the corporate debt …

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Global Asset Allocation 2022 Q3

Global Asset Allocation 2022 Q3

🕔14:38, 21.Jun 2022

Most assets have again delivered negative returns in both local currency and USD, with the notable exception of commodities (or more precisely energy and agricultural products). That was unfortunate for us, given that we were zero-weighted in commodities (having been

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Why I like Chinese equities

Why I like Chinese equities

🕔14:25, 1.Jun 2022

Chinese equities have recently outperformed other regions (while bonds have done the reverse). We ask whether this is a dead-cat bounce or the start of a new trend. There are many worries about Chinese stocks but we suspect a lot

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Have consumers returned to spending on services?

Have consumers returned to spending on services?

🕔10:25, 17.May 2022

The COVID-19 pandemic increased the proportion that developed world consumers spend on goods versus services. This has been reflected in the outperformance of sectors focusing on the production and selling of goods. We think that consumer spending patterns will return

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The Big Picture Global Asset Allocation 2022 Q2

The Big Picture Global Asset Allocation 2022 Q2

🕔17:33, 11.May 2022

The year started with central banks turning hawkish, followed by Russia’s invasion of Ukraine, both of which destabilised financial markets. Many cyclical assets are now cheaper than when we last wrote and we are adding to equities within our Model

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The causes and course of inflation

The causes and course of inflation

🕔15:49, 10.May 2022

Recent conversations with investors reveal a lot of confusion about what causes inflation and what the future path will be. We take a look at various explanations including a Malthusian view of longterm drivers, shorter-term views of more proximate drivers

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A difficult balancing act

A difficult balancing act

🕔10:10, 9.May 2022

Global equities retreated in the first quarter of 2022 in the face of higher inflation and the war in Ukraine. The US Federal Reserve has become even more hawkish despite the increasing threat of a significant slowdown in economic growth.

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Sectors in Fed cycles

Sectors in Fed cycles

🕔16:05, 15.Mar 2022

The tragedy unfolding in the Ukraine has been the main focus for financial markets this week. The impact on global economic growth remains to be seen, but we believe that the US Federal Reserve will start tightening monetary policy by

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The economic and market consequences of war

The economic and market consequences of war

🕔09:55, 1.Mar 2022

We put some numbers on the effect of Russia’s invasion of Ukraine. We guess it could reduce global GDP by 0.5%-1.0% (while boosting inflation) but policy support may dampen that effect.  What a tragedy for the people of Ukraine. They

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The spectre of rising rates and the technology sector

The spectre of rising rates and the technology sector

🕔10:02, 22.Feb 2022

Equity markets started 2022 like someone running to catch a train. Investor sentiment has since turned ever more hawkish on interest rates as inflation showed no signs of moderating. The technology sector has been caught at the sharp end of

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Why is gold misbehaving?

Why is gold misbehaving?

🕔16:48, 8.Feb 2022

Gold has done amazingly well, considering the rise in US treasury yields. Geopolitical tensions and fears of inflation may be helping. But we suspect that without US recession it has further …

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Fed tightening: we favour equities and short duration

Fed tightening: we favour equities and short duration

🕔10:19, 2.Feb 2022

The Fed has told us it will soon raise rates. History suggests equities and short duration bonds will outperform over the coming months. The late start to this tightening cycle may complicate matters. So now we know – the Fed has

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Alternatives under the microscope

Alternatives under the microscope

🕔15:52, 24.Jan 2022

Some alternative assets performed very well in 2021, especially private equity and Bitcoin. But we think 2022 will be very different with less growth but lots of policy tightening. Hence we expect a convergence of returns but still favour cyclical

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The Aristotle List: 10 improbable but possible outcomes for 2022

The Aristotle List: 10 improbable but possible outcomes for 2022

🕔15:56, 11.Jan 2022

Uncommon truths  It is time to forget central scenarios and think about improbable but possible outcomes. Market sentiment is now mixed (thanks to the Fed), so our list of surprises contains something for everybody (these hypothetical predictions are our views

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2021 in review

2021 in review

🕔14:35, 6.Jan 2022

The Covid pandemic again dominated our thoughts in 2021. Nevertheless, cyclical assets did well (though our list of 10 surprises had mixed results). We are more cautious about 2022. A year ago, we were hopeful that vaccines would allow strong

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Is the sun setting on the outperformance of banks?

Is the sun setting on the outperformance of banks?

🕔15:16, 14.Dec 2021

The economic recovery has been thrown into jeopardy by the emergence of the new Omicron variant of Covid-19. However, we think that it is unlikely to completely derail the cycle and should allow central banks to tighten monetary policy in

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Could there be a shortage of oil?

Could there be a shortage of oil?

🕔15:21, 30.Nov 2021

Could a lack of upstream investment lead to a shortage of oil and higher prices? We think lower investment was due to falling prices and believe it is now reversing. We remain wary of oil. 

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Global Asset Allocation 2022 Outlook

Global Asset Allocation 2022 Outlook

🕔10:05, 23.Nov 2021

Given our view that 2022 will be a year of transition and that asset class returns will converge, we adopt a more balanced approach within our Model Asset Allocation, though still maintain a preference for cyclical assets. We reduce the

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Africa 2021 A continent of opportunity

Africa 2021 A continent of opportunity

🕔00:58, 17.Nov 2021

We believe that Africa will be the economic and investment story of this century. However, it is a continent of 54 countries, each with its own potential, pitfalls and capacity to absorb different forms of investment. The aim of this document is

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On corporate margins and inflation rates

On corporate margins and inflation rates

🕔16:14, 4.Nov 2021

The sharp rise in inflation rates across many economies driven by supply chain issues and labour shortages has been a major concern for investors as economies opened up after pandemicrelated lockdowns. Among other effects, this may have an impact on

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A transitory change in correlation

A transitory change in correlation

🕔14:30, 11.Oct 2021

Uncommon truths: Rising bond yields have recently been associated with falling equity prices (reversing the trend of this century). We think this is a temporary reversal and do not fear higher yields, unless caused by costpush inflation (we would then

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The Big Picture Global Asset Allocation 2021 Q4

The Big Picture Global Asset Allocation 2021 Q4

🕔14:09, 23.Sep 2021

Despite another good three months for cyclical assets, we are sticking with them within our Model Asset Allocation. We make minimal changes, with a reduction in the allocation to highyield credit (to Underweight) and a corresponding increase to equities (going

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Climate change revisited

Climate change revisited

🕔09:26, 24.Aug 2021

A range of emission and temperature change scenarios are examined. It is clear that technology will be key in mitigating change. However, we think large-scale adaptation could benefit infrastructure, engineering, housing and …

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021 Invesco Global Sovereign Asset Management Study

021 Invesco Global Sovereign Asset Management Study

🕔14:33, 4.Aug 2021

With Covid-19 top of mind, impacting both operations and investment strategies, the impact of the ongoing pandemic is the major theme running throughout. This includes an examination of adjustments made in response to the crisis and the impact on long-term

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The end of the beginning?

The end of the beginning?

🕔16:26, 22.Jul 2021

Strategic Sector Selector The resilience of the rally in global equities was tested in the second quarter of 2021 by a resurgence of COVID-19 cases and more hawkish messages by the US Federal Reserve. However, markets continued to grind higher

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Global debt review 2021

Global debt review 2021

🕔16:35, 2.Jul 2021

Global debt ratios increased by a record amount in 2020. Half was due to rising government debt and the biggest gains were in developed countries. Falling bond yields dampened the rise in debt service ratios but that may not last,

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The Big Picture 2021 Q3

The Big Picture 2021 Q3

🕔11:34, 28.Jun 2021

We believe this economic cycle is in its infancy and, despite valuation concerns, are sticking with a preference for cyclical assets within our Model Asset Allocation. We make minimal changes, with a small reduction in the allocation to commodities (to

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Staying the course

Staying the course

🕔15:17, 19.Apr 2021

Strategic Sector Selector  Global equity markets posted strong returns in 2021 Q1 after a double-digit rise in the final quarter of last year despite a renewed rise in infection rates in Europe, South Asia and South America. We think the

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What can stop Biotech?

What can stop Biotech?

🕔12:47, 22.Feb 2021

The biotech sector has generated stellar returns since its inception and we view it as a strategic pillar of our model allocations. However, the growth advantage is not what it was and we fear the short-term effect of rising bond yields.

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Hyper Real: An Overview of Global Blockchain Industry Trends

Hyper Real: An Overview of Global Blockchain Industry Trends

🕔15:24, 3.Feb 2021

What is blockchain technology? Blockchain technology is an umbrella term covering a set of tools, methods, and processes for electronic recordkeeping between multiple participants. Blockchains are peer-to-peer (P2P) networks composed of different entities that collectively maintain and update a shared set of records.

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Central banks in a pickle

Central banks in a pickle

🕔14:50, 2.Feb 2021

Central banks in a pickle Uncommon truths  We think tapering is off the agenda for 2021 and believe that central banks may purchase increasing amounts of assets. That may be good for risk assets this year but we worry where

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2020 – the year of living dangerously

2020 – the year of living dangerously

🕔12:33, 7.Jan 2021

Uncommon truths  2020 – the year of living dangerously Our list of 10 surprises didn’t envisage the global pandemic that dominated 2020. Even so, we had some successes and cyclical assets did well. We expect that to continue in 2021,

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The builder’s guide to Bitcoin

The builder’s guide to Bitcoin

🕔08:08, 6.Jan 2021

Uncommon truths  Looking at global stock indices, you wouldn’t know there had been a global pandemic and recession during 2020. On the other hand, gold bears witness to the problems and Bitcoin has recently taken up the mantle. Applying our

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Light at the end of the tunnel

Light at the end of the tunnel

🕔11:42, 23.Nov 2020

The Big Picture – 2021 Outlook 2020 has seen defensive assets outperform cyclicals. We expect the opposite in 2021. Despite short term Covid-related risks, recent vaccine news provides valuable light at the end of the tunnel. Unfortunately, some cyclical assets have

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