Weekly Market Recap
Week in review
- 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