Four reasons to invest in commodities in 2018

Falling crude oil inventories, weaker US dollar provide investors in commodities reason for optimism

Time to read: 4 min

Commodity performance has been mixed in recent years. A strong rally in 2016 was followed by more modest returns in 2017, with gains in industrial metals offsetting weakness in energy and agricultural commodities. As we move into 2018, I believe conditions are favorable for commodities. Here are four reasons to take a closer look.

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Lessons from the stock market sell-off

Weekly Market Compass: Investors get a stark reminder of the impact of volatility

Time to read: 4 min

Last week ended on a bad note. The yield on the 10-year Treasury moved up from 2.695% to 2.852% in just five days,1 spiking on the release of the US employment situation report for the month of January. Not only did yields globally then rise, but this brought on the biggest sell-off in US stocks in nearly two years — which then spread to Europe and Asia, putting downward pressure on equities in those regions. As I write this, futures suggest an extension of the sell-off today.

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Solid job gains and wage pickup in January affirm strong growth outlook

Implications for inflation in focus

James OngTime to read: 2 min

Today’s nonfarm payroll and wage statistics point to solid growth for the US economy. At 200,000 jobs, January employment gains were above consensus, and average hourly earnings surprised to the upside, growing 2.9%, a cycle high.1 Invesco Fixed Income has been very positive on US growth in the last several quarters, and these results support our view. January wage data were generally in line with our “wage tracker” model, which has been pointing to consistent (although slow) gains in wages. Today’s robust jobs numbers support our forecast that the US economy could grow by around 2.75% in 2018.

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A rising tide for fixed income?

Opportunities in high yield, MLPs, retail and the (still unloved) energy sector

Time to read: 3 min

In my recent blog on the impact of tax reform, I explained why I believe the new tax law should be extremely supportive of the US investment grade (IG) bond market, including provisions that could lead to reduced supply. Looking beyond IG, the news appears to look good for other fixed income sectors as well.

Opportunities in MLP hybrids

Master limited partnerships (MLPs) are, simply put, partnerships that are publicly traded on a national stock exchange. Most of them operate in the energy sector. After an extended period of

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Multi-alternative funds: Alts for one and one for alts

How multi-alternative funds may eliminate choice overload for investors

Time to read: 2 min

In my most recent blog, I described how choosing the appropriate alternative strategy (Real estate? Market neutral? Senior loans?) could become the biggest challenge for new investors in alternatives. This is one of the most common questions I receive here at Invesco, along with how to identify the best fund managers and how to select specific alt funds for a portfolio. This three-part dilemma speaks to the challenge of navigating the multi-faceted world of alternative investments.

I have written previously about the potential benefits that alternatives may deliver, be it boosting returns, reducing risk, providing diversification or delivering uniquely timed returns. However, it is much harder to select the specific investment that may best fulfill a given set of individual objectives. There are three reasons why:

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Latin America: Will politics overshadow GDP growth?

Earnings expectations are improving in Brazil, but high uncertainty hinders Mexican growth

Time to read: 2 min

On the back of a broad pickup in Latin American economic activity, real gross domestic product (GDP) growth is expected to accelerate this year.1 However, continued political uncertainty and critical elections in Mexico and Brazil could weigh on the region. With market exposure in both countries, what are the key areas the Invesco International Growth Fund team will be watching in 2018?

Brazil: Earnings expectations are on the rise, but political doubts linger

Despite a year of political turmoil and delayed reform, Brazil’s fundamentals showed signs of

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Are we seeing a shift from global connection to economic protection?

Weekly Market Compass: A falling US dollar worries Europe, and tariffs enter the global conversation

Time to read: 4 min

Last week offered some stark reminders that we live in a very global and interconnected world. Given how interwoven our international relationships have become, the current trend toward de-globalization carries with it many consequences — and protectionism could become the biggest economic risk of them all.

The US dollar declines, to Europe’s concern

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Is international stock outperformance sustainable?

We examine the fundamental factors and the macro risks

Time to read: 2 min

2017 marked only the second time in the last eight years that international markets outperformed the US, with the MSCI All Country World Index (ACWI) ex-US returning 27.19%, and the S&P 500 Index returning 21.83%.1 So is this the beginning of a sustained shift in outperformance? On one hand, there is a list of risks facing international markets, from Brexit to a potential slowdown in China. But on the other hand, international companies have recently been trading at a substantial valuation discount compared with the US, and we have been seeing strong profit expansion.

What is the EQV landscape for international markets?

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Could tax reform benefit consumer spending?

Investment strategies featuring the quality factor could benefit from current trends in consumer spending

Time to read: 2 min

Advance estimates of US retail sales for December 2017 displayed vibrant year-over-year growth of 5.64%, according to the US Census Bureau.1 The most recent report, released on Jan. 12, covers sales ex-food, automobiles, gasoline and building materials. December sales growth was at its highest level since peaks in 2011 and 2014, and was above the trend seen since early 2011 — further highlighting strength in consumer activity.

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Are emerging markets still attractive?

Even after a 34% gain in 2017, we see continuing opportunity in EM this year

Time to read: 2 min

Emerging markets (EM) delivered in 2017, with the MSCI Emerging Markets Index returning 7.1% in the fourth quarter and 34% for the year — outperforming the developed market MSCI EAFE Index in both periods.1 This strong performance was driven by improving economic conditions and stronger earnings. Among the macro positives were a solid pickup in global trade, improvement in external accounts, upward revisions to gross domestic product (GDP) growth, benign inflation and price support for energy and commodities.

Country-specific highlights

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