Invesco expects that there will be a major shift in the global economic landscape. In its mid-2024 investment outlook, Invesco stated that there is a great opportunity that US interest rates have peaked and they anticipate that the Federal Reserve will enter a global easing cycle later this year. They mentioned that US small-cap stocks have high leverage in interest rate cycles, and their relative valuation has discounted to lows not seen in decades, potentially benefiting from a decline in interest rates. Due to the lower valuation of Chinese stocks and general market cautiousness, Invesco has a more positive view on the prospects for the Chinese market. They believe that China's incremental housing policy measures may help mitigate the impact of the real estate industry slump on the overall economy. Invesco anticipates that inflation will be in line with the Federal Reserve's target levels, and they do not expect employment to pose upward pressure on service sector inflation. Despite these favorable trends, they forecast a slowdown in the US economy due to credit tightening for businesses and consumers. In this delicate outlook, investors must remain flexible in adjusting their strategies to cope with the uncertain economic environment. Luke Browne, Head of Asset Allocation for Asia at Invesco, excluding Japan, mentioned that the global economy is currently in good shape in mid-year. Despite recent slowdowns in economic growth, the US economy remains in a leading position driven by strong consumer activity. Additionally, economies like Europe, Japan, and China are showing signs of stability and improvement. Policymakers are taking interventions to address challenges in various industries. The pace of global inflation slowdown, especially deflation in the US, will be a focus for the remainder of the year. Central banks in countries like Switzerland, Canada, and the Eurozone have been reducing interest rates over the past few months. However, uneven progress in deflation due to factors like ongoing inflation in areas such as car insurance and housing costs has led the Federal Reserve to adopt a cautious approach. Looking ahead, it is believed that these one-time inflation factors will stabilize, allowing the Federal Reserve to cut rates before the end of the year. This is crucial as lowering rates in an environment of stable economic growth can make the relative valuations of markets or assets more attractive. For example, US small-cap stocks have high leverage in interest rate cycles, and their relative valuation has discounted to lows not seen in decades. Therefore, they are likely to benefit from an interest rate decline. In addition, attractive investment opportunities are emerging in developed and emerging markets outside the US, especially in Japan and India. Investors should also focus on energy and commodities industries. Furthermore, ASEAN markets are offering investment opportunities as they enter a loosening cycle, presenting more opportunities to seize. Murray Collis, Chief Investment Officer for Fixed Income Products in Asia (excluding Japan) at Invesco, emphasized that Asian credit has shown outstanding performance compared to other fixed income asset classes this year. There are good reasons to believe that this positive trend will continue until the end of the year, providing investors with substantial returns and potential capital appreciation. Murray Collis stated that Asian fixed income markets experienced some volatility at the beginning of the year due to uncertainty surrounding the Federal Reserve. Thus far, elections in various countries have had minimal impact on Asian bonds, as the market generally expects policy to remain unchanged. While US investment-grade bonds were negatively affected by the Federal Reserve's delay in rate cuts, Asian investment-grade credits have performed well in a strong fundamental and favorable market environment. High-yield Asian credit has been particularly impressive from the beginning of the year, with stable default rates and relatively low valuation levels beginning to attract investor interest. From the perspective of Asian credit, it is expected that the positive momentum of this asset class will continue into the second half of the year, mainly driven by strong investor demand to meet expected increases in new issuances. The fundamentals of the Asian economy remain resilient and continue to drive global growth. Compared to developed market credits, Asian credit trades at more attractive valuations and is likely to attract the interest of investors seeking diversified income benefits. If the Federal Reserve cuts rates later this year, investors may increase their allocation to risky assets. In terms of risk adjustment, investment-grade credit remains attractive. Additionally, with credit spreads at historical highs, providing investors with favorable entry points, the opportunity in the Asian high-yield sector is also promising. Although inflation in Asia is generally under control, the persistently high interest rates in the US pose obstacles to consumption and investment in Asian economies. However, Marco Giubin, Senior Portfolio Manager for Equities at Invesco, believes that as these obstacles weaken, along with upward revisions in earnings forecasts in Asia (excluding Japan) and attractive valuations, there may be a re-rating of Asian stocks. Marco Giubin pointed out that the expected price-earnings ratio for Asian stock markets is around 12 times the estimated earnings for 2025, with an expected earnings growth rate of over 15%. In contrast, the expected price-earnings ratio for the US stock market is higher, around 21 times the estimated earnings for 2025, with a slightly lower expected earnings growth rate of 14%. Compared to US stocks, Asian stocks seem to offer more attractive investment value. For investors, the lower price levels of Asian stocks offer the potential for higher returns. From a regional perspective, due to the lower valuation of Chinese stocks and general market cautiousness, Invesco has a more positive view on the prospects for the Chinese market. China's incremental housing policy measures may help mitigate the impact of the real estate industry slump on the overall economy. While India maintains strong structural trends, concerns about the high valuations of Indian stocks and the reduced parliamentary seats of the Modi government have led to concerns about the sustainability of its investment growth model, prompting caution in the Indian market, favoring consumer-related stocks that have underperformed industrial stocks ahead of the general elections. In summary, Marco Giubin believes that in North Asia, South Korea is preferred over Taiwan, as South Korean stocks have attractive valuations and the dynamic random access memory (DRAM) industry is in an upswing. Additionally, while many technology stocks in Taiwan are not directly involved in artificial intelligence-related businesses, their stock prices have been significantly revalued due to this theme. Furthermore, Taiwan's manufacturing capacity is relatively abundant, helping to improve profitability.Outside, many South Korean battery manufacturers have significantly underperformed due to concerns about the growth of the electric vehicle market. However, considering that growth opportunities still exist, these companies' value appears to be very cheap. Recently, protectionist measures implemented against Chinese suppliers in markets such as North America and Europe may also accelerate interest in South Korean electric vehicle supply chain as an alternative."Bonjour, comment a va?" "Hello, how are you?"