Weekly Market Recap

Asia Pacific

29/07/2019

Week in review

Week ahead

30/07 – JP – BOJ policy meeting
01/08 – Global – Manufacturing PMI
01/08 – U.S. – FOMC meeting
02/08 – U.S. – Light Vehicle sales, Nonfarm Payrolls

Thought of the week

The S&P500 and Nasdaq broke record highs again last Wednesday. Earnings season has been mixed, but perceived progress on trade talks, relatively positive economic data and expectation of a July cut to the U.S. federal fund rate are buoying the U.S. equity market. So far, the latest round of earnings has shown slowing revenue growth and margin contraction, but a strong trend of share buybacks has been supportive for EPS growth. Looking forward to 2020, current consensus earnings growth estimates of 11% looks to be increasingly challenging with softening growth and higher cost pressures stemming from a still tight labor market. As such, downward revisions might be on the horizon. Amid a low but positive earnings growth environment, structural opportunities still remain in cyclical sectors, though high valuations should be taken into consideration. Income will continue to play a critical role in buffering against volatility and as slower earnings growth limits upside.

Chart of the week
S&P 500 2Q EPS consensus estimates
Index, Mar. 2019 = 100

Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
Data most recently available as of 26/07/2019.

All returns in local currency unless stated otherwise.
Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.

RELATED FUNDS

JPMorgan Asia Equity Dividend Fund

To aim to provide income and long term capital growth by investing primarily in equity securities of companies in the Asia Pacific region (excluding Japan) that the investment manager expects to pay dividends.

Fund details

JPM Asia Pacific Income A Fund

To provide income and long term capital growth by investing primarily in income generating securities of countries in the Asia Pacific region (excluding Japan).

Fund details

JPMorgan China Income Fund

To provide investors with income and long-term capital growth by investing at least 70% of its non-cash assets in (a) equity securities of companies which are based in, listed on any stock exchange of, or operate principally in the PRC and that the Investment Manager expects to pay dividends and (b) Chinese debt securities issued and/or distributed in or outside the PRC.

Fund details

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