Weekly Market Recap
Asia Pacific
14/10/2019
Week in review
Week ahead
- 14/10 – CN – Trade data, CPI & PPI Inflation
- 16/10 – U.S. – Retail Sales
- 17/10 – U.S. – Housing Starts
- 17/10 – CN – Fixed Asset Investment, Retail Sales, Industrial Production
Thought of the week
China’s Caixin Services PMI fell again in September and has been in steady decline since the start of the year. Declining business confidence was the key drag, and the sub-index has fallen to the low end of its historical range. However, an interesting contrast can be observed between new orders, which grew at the fastest pace since January 2018, and new export orders, where activity has continued to slow. This suggests that new business is mainly being derived domestically as the Chinese economy continues to face external pressures arising from the U.S.-China trade dispute. Last week, a flurry of trade-related news and further restrictions deployed by the U.S. caused financial markets to whipsaw as delegates from the U.S. and China head into a highly-anticipated round of negotiations. Given that such uncertainty and volatility will likely persist, investors can adopt a more defensive tilt in their portfolios, weighting higher in fixed income or investing in companies with a greater domestic focus.
Chart of the week
China services sector slows further
Index
Source:IHS Markit, J.P. Morgan Asset Management.
Data most recently available as of 11/10/2019.
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