Invesco

Are we headed for a global slowdown? Read our latest update on the US Federal Reserve and five key issues to monitor closely in the coming week.

Our 2018 global factor investing study draws on insights from 300 face-to-face interviews with institutional and retail factor investors. 

• The results of the US midterms have had an initially supportive effect on US markets.
• Beyond this initial market response, we think there are important implications to explore for global markets, for various US equity sectors and for major macro themes.
• In this commentary, we examine four key areas: US politics, fiscal/monetary policy, domestic policy and foreign economic policy.

The trends we described last quarter - rising interest rates, tightening liquidity conditions and trade protectionism remained evident in Q3. On top of this we observed runs on a number of emerging market currencies (Argentina and Turkey in particular) which caused a degree of contagion to all other emerging market currency and stock markets.

Stuart Edwards, Fund Manager at Invesco comments on recent events in Italy and what it means for bond markets.

It’s hard to have a conversation on the US markets these days without being drawn to a debate on value versus growth. And with good reason: the vast outperformance of growth stocks over value stocks in recent years has benefitted many and hurt others - count ourselves in the latter camp.

Mark McDonnell, Macro Analyst for the Henley Fixed Interest team looks at the hiking cycles within G10 countries and highlights Norway, Sweden, Australia and Canada as countries that are most likely to disappoint. Most of these countries are stuck between 'a rock and hard place' – caught between the monetary policy of their larger trading partner and high levels of private sector debt.

Brazil is out of recession but the economy is still not firing on all cylinders. What is holding it back and do we expect this period of sluggishness to continue?

Global Equity Income orientated strategies have been underperforming the wider market for some years now. It certainly feels like a long time ago since an avalanche of research was singing the praises of high yield investing.

Asia faces near-term challenges, but is well positioned given solid fundamentals. 

Income seeking investors have faced headwinds in the aftermath of the global financial crisis. But with demand for income rising, investors may need to cast their nets wider than some of the more traditional income routes.

As a valuation-orientated investor, Martin Walker's investment style brings valuation at the point of purchase to the foreground, as he seeks to find compelling opportunities in areas of the market that other investors would shun.

Will a trade war undermine economic growth?  While it is possible that political issues could hamper the economic upswing in some countries, my view remains that the business cycle is the ultimate and dominate driver of asset prices over any extended period.

In this article Mark Barnett highlights the investment opportunities he sees within the UK’s alternative finance market. 

With earnings in Asia no longer surprising, and the risk of an escalating trade war lurking in the background, are there areas where value can still be found? Listen to Ian Hargreaves explain what this means for his portfolio.

Ultimately, we think Italian politics will be constricted by reality, and we therefore want to be involved at the right levels.