Weekly Market Compass
When doves yell: Fed loudly signals a September rate cut
Minutes from the July FOMC meeting were surprisingly dovish, and Federal Reserve Chair Jay Powell suggested a likely policy shift in comments from Jackson Hole.
Despite another good three months for cyclical assets, we are sticking with them within our Model Asset Allocation. We make minimal changes, with a reduction in the allocation to highyield credit (to Underweight) and a corresponding increase to equities (going further Overweight). Real Estate and equities remain our favoured cyclical assets, while cash is our diversifier of choice. We boost allocations to emerging market (EM), Japanese and UK assets, with an overall preference for UK and EM assets.
In our view:
Our best-in-class assets (based on 12m projected returns)
When doves yell: Fed loudly signals a September rate cut
Minutes from the July FOMC meeting were surprisingly dovish, and Federal Reserve Chair Jay Powell suggested a likely policy shift in comments from Jackson Hole.
Reversal of fortune
After the sharp decline bottomed on August 5, new data drove a strong US and global stock rally for one of the best weeks this year. We still believe the US will avoid a recession.
Rotating markets and politics
In Uncommon Truths, Invesco experts Paul Jackson and Andras Vig’s provide a regular in-depth look at the big topics impacting markets.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Data as of 31 May 2021 unless stated otherwise.
This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.