Invesco Multi Asset team - Russia/Ukraine conflict update
Are the latest developments in the Russia/Ukraine conflict changing the Multi Asset team's Central Economic Thesis?
No. At present we do not think events in Ukraine will prove to be something more systemic in nature.
Historically, the initial reaction to increased geo-political risks and tensions is often swift and negative but investors soon move on. Typically, these types of events mark the point of peak fear for the market.
The key consideration for us, keeping in mind our longer-term perspective, is the extent to which a full-scale invasion would impact global growth, the path of monetary policy, and corporate earnings – three key components underpinning our current Central Economic Thesis.
Whilst very troubling from a humanitarian standpoint, we don’t think recent events materially change any of these elements and therefore the case for most of our portfolio ideas over the longer-term. As a result, we maintain the view that global growth will continue to slow but remain above trend, central banks will stay on course and that capital spending and corporate profitability will stay robust albeit consumer sectors will take a hit while commodity sectors will be given a boost.
