January 21, 2020
Private equity continues to buy midstream and the Energy Transfer acquisition of SemGroup closes. The master limited partnership (MLP) sector saw a series of acquisitions take place in December, from Blackstone reaching an agreement with Tallgrass Energy to Energy Transfer closing on the SemGroup acquisition.
January 14, 2020
We believe China is ground zero for the future of retail and the West will learn from and adapt the experiments that are already moving to scale in the East. Consider Alibaba, the Chinese Internet giant whose wide-ranging businesses span e-commerce, offline retail, fintech, online video, maps and browsers, and artificial intelligence.
January 7, 2020
The conflict in the Middle East could pressure business sentiment. 2019 was a great year for markets, and equities delivered strong returns for the year. US stocks led the way at 29.07%, Chinese stocks returned 20.94%, European stocks returned 20.03%, and emerging markets delivered 15.42%.
December 23, 2019
Weekly Market Compass: As the WTO reaches a crisis point, countries may take trade issues into their own hands. By way of background, when the WTO was created more than 20 years ago, the US was given veto power over appointments to its seven-member appeals panel.
December 18, 2019
December 17, 2019
Two developments last week suggest that we have entered a period of improved economic policy certainty. Both the UK election and the US-China Phase 1 trade deal promise to bring far more clarity for businesses as they plan for 2020 and beyond.
December 3, 2019
As we look ahead to 2020, it’s clear that central banks are still shouldering the burden for stimulating the economy via monetary policy. That should bode well for 2020, in our view. However, we believe such monetary easing should be more positively impactful for asset prices than the overall economy. Economic uncertainty is likely to continue to depress capital spending, in our view, and we must watch vigilantly to ensure it doesn’t spill over into diminished hiring plans.
November 26, 2019
Last week brought a number of key developments from central banks around the world, from the release of the Federal Reserve’s (Fed) latest meeting minutes, to a reaffirmation of the Bank of Canada’s (BOC) monetary policy, to the first speech from European Central Bank (ECB) President Christine Lagarde.
November 19, 2019
Recent market events look a lot like the mid-90s when the Fed stopped tightening and the cycle found new life. To make it simple, I’ll state my conclusion upfront. My outlook for 2020, or at least the first half of 2020, is quite sanguine.
November 12, 2019
November 5, 2019
Last week’s Federal Reserve (Fed) meeting proceeded largely as expected, but a very important development for stocks occurred during the follow-up press conference. As expected, the Fed decided to cut rates by 25 basis points. Additionally, in its announcement, the Fed removed the language that stated it would “act as appropriate to sustain the expansion.”
October 29, 2019
After a positive week for stocks, markets brace for news on the Fed’s outlook, US-China trade negotiations, and the eurozone and Chinese economies. Last week was a “risk on” week for the markets, with stocks rising.
October 22, 2019
After all, some of the biggest stock market crashes have occurred in October, such as the Panic of 1907, the 1929 crash, and the 1987 crash. We even witnessed a significant stock market sell-off last October. However, if we were to look at the overall statistics, we would see that October has not historically been the worst month for stock market performance. In fact, there is even a name for this behavioral finance phenomenon — “the October effect.”
October 15, 2019
October 8, 2019
Perhaps more than any other sport, baseball is famous for statistical analysis, and there are seemingly endless ways to evaluate every player. Similarly, there are many ways to evaluate stocks, and different portfolio managers assemble their “teams” using a variety of methods. To understand the differences, consider the ways that coaches can choose players for a baseball team.
October 1, 2019
One of the key themes I have been discussing in the last several years is geopolitical disruption — and we got a heavy dose of it last week. However, one of my main points over the past few years is that investors should try to identify the geopolitical disruption that really matters for the economy and markets, and ignore the events that are just background noise (most fall into this category, in my view).
September 24, 2019
Another very surprising but ultimately anticlimactic chain of events occurred over the last week. There was a serious drone strike on Saudi oil facilities over the weekend of Sept. 14 and 15, knocking out two key installations and dramatically curtailing oil production. Not surprisingly, there was a major shock to the price of oil on Monday, Sept. 16, with crude oil rising more than $10 per barrel in price.1
September 17, 2019
Here’s the reality, parents: While organized sports offer a great way for your child to learn valuable life lessons and develop their skills, they’re far from a scholarship guarantee. To truly set your child up for success, you have to start saving for college as soon as possible — and I believe a 529 plan can help.
September 13, 2019
The yield curve has been a constant topic of conversation among investors since mid-August, when the 2-year/10-year Treasury curve briefly inverted and launched furious speculation that a recession may be around the corner. The same holds true among Invesco’s market strategists, who have been debating what an inverted yield curve means and whether a recession is indeed inevitable.
September 3, 2019
As we embarked on this year, I expected 2019 to be the year of slower growth but better policy. And that, I posited, would be better for financial markets than 2018’s combination of strong growth and bad policy, specifically Federal Reserve (Fed) interest rate hikes and trade tariffs.
August 20, 2019
Last week, the US Treasury yield curve, specifically the spread between the 10-year US Treasury rate and the 2-year US Treasury rate, briefly inverted. An inverted yield curve is considered to be a good predictor of recession, and so markets sold off on fears that a recession will occur in the next year. However, I believe a US recession is not a foregone conclusion — and so we should monitor the economic data closely.
August 13, 2019
In my view, the US has exhibited these two forms of overconfidence bias in its current trade situation. First, the desirability effect: In my travels, it has been clear that the vast majority of Americans I’ve spoken with believe it would be desirable to have more favorable trading conditions, which helps to explain why the Trump administration has been so focused on strong-arming other nations, especially China, into better trade agreements.
August 6, 2019
The Federal Reserve (Fed) cut rates by 0.25% for the first time in over a decade,1 a move largely expected by the market. Heading into the July Federal Open Market Committee (FOMC) meeting, much of the debate was around whether or not the Fed would deliver 25 or 50 basis points. However, we were focused on the statement and Fed Chairman Jerome Powell’s press conference for further insight on future policy.
August 1, 2019
Remember the widespread concern about the Federal Reserve’s monetary policy response to the financial crisis? A decade ago, investors worried that the Fed’s policy, which was designed to combat deep-rooted deflationary impulses, was going to be “massively inflationary,” thereby leading to a spike in US interest rates and depressed equity valuations.
July 30, 2019
The IMF revised global growth for 2019 down to 3.2% from 3.3% in April, which continues a series of downward revisions to growth. Of note is that the IMF substantially downgraded its estimate of world trade growth to just 2.5% this year, which is a downgrade of nearly a point since April’s outlook.
July 23, 2019
On May 14, 2019, the Senate Finance Committee held a hearing titled “Challenges in the Retirement System.” The hearing focused on a variety of issues relating to retirement security, such as increasing workplace retirement plan coverage and participation and increasing participant savings.
July 16, 2019
There is a famous Rolling Stones song that provides sage advice for demanding toddlers and spoiled teenagers — and perhaps financial markets: “You can’t always get what you want. But if you try sometimes, well you might find, you get what you need.” That refrain is stuck in my head as I anticipate this month’s Federal Reserve (Fed) meeting.
