Trade talk tempers Asian market optimism

Quality and valuation may become more important to investors if volatility continues

Time to read: 3 min

Investors began 2018 with a generally optimistic view, but this euphoria faded by quarter-end as protectionism and talk of a US/China trade war became a key concern. Despite investor pessimism, we expect further volatility might create the opportunity to invest in high-quality Asian equities at lower valuations.

Pre-negotiation posturing

Market volatility spiked as US President Donald Trump started delivering

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Three reasons why we’re bullish on Brazil

Despite political turmoil, we see long-term positives for Brazilian stocks

Just as Brazil seemed to be recovering from its worst recession in history, it took another hit last May. A secret recording surfaced of President Michel Temer allegedly discussing a scheme to pay hush money to jailed former speaker of the lower house, Eduardo Cunha. Since then, President Temer was cleared in early June of campaign finance violations, but was charged in late June with corruption related to a bribery scheme. This ongoing political turmoil has delayed the approval of much-needed pension and other reforms. And yet, Brazil’s current fundamentals are much stronger than at year-end 20161, with a benign inflation outlook, strong companies and a healthy balance of payments.

For us, as bottom-up investors, all of this adds up to potential opportunity. Below, I discuss the positive signs that the Invesco International and Global Growth team sees in Brazil.

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