Video Channel

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Market narratives and investment themes appear to vacillate every three months because of diverging trends in global growth, inflation and monetary policy.

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Global growth is improving, but not evenly.

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The US is slowing, though the eurozone and Asia are accelerating.

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Disinflation continues but more slowly in the US, which is why the Fed could wait until at least September to cut rates.

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More so, the recent elections in Mexico, India and South Africa are a good reminder that political risk can lead to market volatility.

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The mixed economic data coupled with surprising election outcomes could have important implications for financial markets in the months and years ahead, which is why we think having a balanced portfolio makes sense.

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In our Invesco mid year outlook, we focus on opportunities that have been created amidst this divergent.

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While we become more risk tolerant in the second-half of the year as fundamentals improve and rate cuts are in the offing, we think U.S.

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equity valuations are stretched and more opportunities lie in European, Japanese and emerging market equities.

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On the fixed income side, yields and rates remain high, though credit spreads remain tight, which is why we like high quality non investment grade debt such as bank loans, private credit and other alternatives such as real estate.

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Our investment outlook for the second-half of 2024 has become more optimistic, though risks remain and we closely watch geopolitical tensions, US elections and financial fragilities.

To find out more about our Invesco outlook and asset allocation, please visit our website.

Hi, I am David Chao, Global Market Strategist for Invesco Asia Pacific.

The strong performance of many assets over the past four months reflected more optimism about the state of the global economy.

Most notably, March delivered a long-awaited broadening in the US equity market to more cyclical sectors and factors such as value and mid- and small-cap stock – and I think this trend is likely to  continue.

Still, US Equities have performed very well and the potential there is limited. In hunt for better returns of the coming quarter, I am overweight EM equities, and REITs, which have the potential to produce the best returns given low valuations.

From a fixed income perspective, I think emerging market government bonds and higher quality non-investment grade debt, such as senior loans, private credit are likely to do well.

Commodities which have lagged and may benefit from an economic upturn. So I'm warming up there. Within currencies, I am underweight the US dollar and overweight the Japanese Yen.

There continues to be much debate on when the Fed is going to start cutting rates. While our base case remains in June, it’s possible that inflation and interest rates could continue to be elevated.  

In an increasingly complex global environment, APAC investors are reminded to remain diversified yet adaptive to changing market conditions.