Will the Fed start normalization this week?
Weekly Market Review: The world is waiting for Yellen’s historic plan to be put into action
The dials of geopolitical and monetary risk are spinning in different directions across the globe. Of note in the US, markets are wondering whether glimmers of political bipartisanship bode well for reform legislation, and the Federal Reserve (Fed) is gearing up for what may be one of its most important meetings ever.
Last week: Bipartisanship, the BOE and Brexit
Last week saw a dialing down of geopolitical risk in one key region
ContinueHow companies telegraph value through stock buybacks
Value investors can read a lot from share repurchase decisions
Financial statement analysis is often useful for valuing a company’s stock. Using ratios such as price-to-earnings, price-to-sales or price-to-book, investors assess whether a stock is trading at a discount to its intrinsic value. However, these ratios aren’t the only way to assess a stock’s value. I believe that share buybacks can be another helpful tool — when a company’s management team reduces the number of shares outstanding, it is signaling to the market that a stock is trading inexpensively to its intrinsic value.
Of course, as with any strategy, it’s important to understand the performance drivers of buyback strategies, so that you can anticipate when they may be poised to outperform or underperform. And the drivers of buyback strategy performance may be surprising to some investors.
How are share buybacks different from traditional valuation measures?
ContinueThe end of LIBOR as we know it?
The widely used gauge of short-term interest rates could be phased out within four years
The London Interbank Offered Rate, otherwise known as LIBOR, is the primary benchmark for short-term interest rates around the world. LIBOR has existed in various forms for nearly 50 years, but could eventually meet its demise and be replaced by a more exacting alternative.
The importance of LIBOR in determining short-term rates
ContinueUncertainty clouds the view of global markets
Weekly Market Review: Politicians and central bankers continue to create disruption
For the past several months, I’ve talked about disruption as a key theme for 2017 and argued that it would have three key sources this year, including geopolitics and monetary policy. Last week was emblematic of that theme, as geopolitical events and central bank decisions shared the spotlight.
Geopolitical concerns in North Korea and the UK generate uncertainty
Last week started with
ContinueInterest rate outlook: Long-term US rates could rise on global growth and stabilizing inflation
Invesco Fixed Income shares its views on rates around the world
US:
Inflation data continue to surprise to the downside. While this does not mean a December rate hike is off the table, continued weakness could cause the US Federal Reserve (Fed) to question its forecasts. Nevertheless, the Fed remains on track to begin its tapering of reinvestments in September, and we expect inflation to show signs of stability in late 2017. This inflation backdrop, together with robust global growth, will likely pressure US yields higher as term premium becomes priced in.
Europe:
As growth in the European Union continues to gain momentum and broaden, a move away
ContinueCurrency outlook: Global policy convergence will likely weigh on the US dollar
Invesco Fixed Income shares its views on currencies around the world
US dollar:
We expect the US dollar to continue to depreciate over the long term. Synchronized global growth and global policy convergence (toward the US Federal Reserve’s tighter stance) will likely weigh on the US dollar versus developed market currencies. However, short US dollar positioning currently appears stretched. If positions are unwound, this could lead to a dollar bounce in the near term.
Euro:
The euro is likely to continue appreciating, in our view. In addition
ContinueAutonomous vehicles have arrived
Could driverless cars benefit your portfolio down the road?
Science fiction is real. In October of last year, a self-driving semi in Colorado carried over 2,000 cases of beer from Fort Collins to a distribution center in Colorado Springs — a journey of over 130 miles. While there was a professional driver on board, he monitored the trip from the sleeping berth for most of the journey and never took the controls. Even in an age where doctors can print human body parts and drones can replace boots on the ground, this robo-beer run represented quite an achievement. Self-driving vehicles have the potential to impact the everyday lives of Americans as fundamentally as cell phones and personal computers have over recent decades. But do the technologies making this possible represent a compelling investment opportunity?
We at Invesco believe that the advent of autonomous driving presents
ContinueTen things to watch in September
Weekly Market Review: As summer ends, geopolitical tensions ramp up
The month of August tends to be slow and lazy. But investors and politicians are returning from their summer vacations with a long list of issues confronting them in September. Below, I summarize 10 important things to watch this month.
1. North Korea. Geopolitical risk has risen, particularly with
ContinueThe right time for energy?
Why the sector could be ripe for a turnaround
The slow recovery from the global financial crisis would have been expected to support oil, gas and coal prices, but the sharp, concurrent rise in oil and gas production from shale has driven prices to multi-year lows. The 2014 decision by OPEC to rely on a market share strategy (rather than production cuts) also contributed to the current glut. Is there any opportunity to be found in this sector?
Is now the time to reconsider REITs?
The Fed is raising rates. Find out why this environment may be right for REITs.
For eight years after the global financial crisis, income-seeking investors had a dilemma — yields on most traditional bonds had fallen precipitously. To obtain a yield anywhere close to pre-recession levels, one had to assume greater risk. Now, the tables have turned. With the Federal Reserve (Fed) hiking interest rates, there’s a new concern for investors. Given that bond prices tend to fall when yields rise, is there an income-generating investment that may also hold its value in this environment?
Are REITs right for rising rate environments?
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