Invesco examines equity positioning in a late-cycle environment shaped by slowing growth, policy uncertainty, and elevated valuations. The piece leans into a cautious but constructive stance, highlighting that earnings resilience may persist even as macro risks rise. It challenges the idea that defensive positioning alone is sufficient.
Equity Outlook – It’s Too Late to Get Bearish
Invesco
Talley Léger
Research
68 Pages
Key Takeaways
Earnings Resilience Holds: S&P 500 earnings growth expectations remain near 5–7% despite weakening macro indicators, suggesting corporate fundamentals may be more durable than typical late-cycle periods.
Valuation Risk Elevated: US equities trade above historical averages, with forward P/E ratios near 16–17x, raising sensitivity to even modest changes in interest rates or earnings revisions.
Policy Drives Markets: Central bank actions and trade tensions account for over 60% of recent volatility spikes, reinforcing how macro policy shifts increasingly dominate equity market direction.
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