Weekly Market Recap
Asia Pacific
19/08/2019
Week in review
Week ahead
- 19/08 – CN – Foreign Direct Investment
- 21/08 – U.S. – Existing Home Sales
- 22/08 – U.S. – FOMC Minutes
- 23/08 – U.S. – New Home Sales
Thought of the week
Global stocks fell as weak data increased fears over global growth, and bond markets signaled that chances of a recession were mounting. Underscoring rising concerns, the yields of U.S. and UK 10-year government bond yields dipped below those of shorter maturity debt for the first time since the financial crisis – an inverted yield curve has historically been a harbinger of a recession. However, investors should note that quantitative easing policies adopted by global central banks have distorted this barometer of economic health, and it is important to combine this signal with other indicators. Corporate investments have been under pressure amid rising policy uncertainties around trade, while U.S. household consumption remains supported by low unemployment and a strong balance sheet. In this current environment, investors can look to add equities at more reasonable valuations while fixed income’s low volatility and income potential can provide a balanced return.
Chart of the week
U.S. Yield Curve Inversion and Recessions
Difference between 10-year and 2-year U.S. Treasuries
Source: FactSet, Federal Reserve, J.P. Morgan Asset Management.
Data most recently available as of 16/08/2019.
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.
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