Weekly Market Recap
Asia Pacific
14/05/2019
Week in review
Week ahead
- 15/05 – CN – Fixed investments, Industrial Production, Retail Sales
- 15/05 – U.S. – Industrial Production, Retail Sales
- 16/05 – U.S. – Housing Starts
Thought of the week
U.S.-China trade tensions returned as U.S. President Trump renewed threats to raise tariffs on Chinese imports via a tweet on May 5th. This could potentially delay a trade agreement, but we still believe a deal will eventually be reached. As volatility surges, certain asset classes should be relatively resilient to heightened tensions. Last year, ASEAN and Indian equities performed relatively better, while Chinese companies faced pressure. With respect to fixed income, renewed trade uncertainties could dampen growth, driving central banks to remain a dovish tilt. This would benefit high yield corporate debt in developed markets as well as high quality emerging market debt. Overall, investors should recognize that shifting tides amidst the trade dispute will create volatility in the markets. Hence, it is important to build a resilient portfolio via diversification and allow income to cushion momentary dips in your investments.
Chart of the week
Source: Bloomberg Finance L.P., FactSet, MSCI, Standard & Poor's, J.P. Morgan Asset Management.
Equity returns are total returns based on MSCI indices, except the U.S., which is the S&P 500 and China A, which are based on the CSI 300 index in U.S. dollar terms.
Based on Bloomberg Barclays U.S. Aggregate Credit – Corporate High Yield Index (U.S. HY), Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. IG), J.P. Morgan Government Bond Index – EM Global (GBI-EM) (Local EMD), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (EMD), J.P. Morgan Government Bond Index – Global Traded (DM Government Bond), Bloomberg Barclays Aggregate (Global Bonds), J.P. Morgan Asia Credit Non-investment Grade Corporate Index (Asia Corporate HY), Bloomberg Barclays Global U.S. Treasury – Bills (3-5 years) (U.S. Treasury) and Bloomberg Barclays U.S. Treasury – Bills (1-3 months) (Cash). Past performance is not a reliable indicator of current and future results.