Are bonds attractive?
The spike in yields through the first five months of this year has led to some very ugly returns in fixed income.
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Market Commentary
1Q22 U.S. earnings and current market volatility
A re-rating of valuations has led to negative equity returns year-to-date, but importantly, earnings estimates have continued to trend higher. In an environment of rising rates, earnings will be the key driver of returns. (4-minute read)
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Are we in or headed towards a recession?
The US economy is showing signs that the post pandemic surge is beginning to moderate, but we do not think a recession is imminent. Nonetheless, stocks are near correction territory, consumer sentiment has soured to levels last seen in 2011, geopolitical tensions are elevated, and prices are higher everywhere; all of which challenge this view.
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How do investors navigate market volatility?
The war in Ukraine is causing surging commodity prices, COVID lockdowns in China are exacerbating strained supply chains, and 40-year-high inflation has prompted the Fed to aggressively tighten monetary policy. Together these dynamics are also creating uncertainty about future growth.
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Looking beyond the recent volatility
This paper, written by Marcella Chow and Adrian Tong, addresses the current volatility in global equity markets and its investment implications. (4-minute read)
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When will Chinese supply chain pressures ease?
This paper, written by Kerry Craig and Chaoping Zhu, discusses the current Chinese supply chain under the impact of the COVID-19 wave and Chinese policy, and its investment implications. (4-minute read)
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Achieving net zero: The path to a carbon-neutral world
Governments are aligning behind the goal of achieving net zero emissions by 2050, but dramatic changes to the global economy will be required to get us there. Learn more about the policies and innovations that could pave the way to a carbon-neutral world.
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Pressure on the yen and the yuan
This paper, written by Tai Hui, discusses the driving forces behind recent depreciation pressure in the Japanese yen and Chinese yuan, and what this means for investors. (4-minute read)
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Growth pressure and policy easing in China
This paper, written by Chaoping Zhu, discusses the weakened Chinese economic data in March, and the subsequent policy and investment implications. (4-minute read)
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Has the sell-off created an opportunity in growth stocks?
2022 has seen a volatile start, with many of the growth names that performed well in the initial stages of the pandemic—as well as over the prior cycle—under pressure. (4-minute read)
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Should investors hedge the currency when investing in international equities?
Over the last 15 years, international equities have underperformed U.S. equities by a cumulative 270%. Currency played a role in this underperformance, subtracting 25%, as foreign currencies steadily weakened against the U.S. dollar.
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Is market timing worth it during periods of intense volatility?
2022 will likely remain volatile for equity markets, as central banks normalize alongside persistently hot-inflation and geopolitical issues result in prolonged uncertainty.
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Should investors be worried about Asia’s food inflation?
This paper, written by Marcella Chow and Adrian Tong, looks at how food inflation is impacting Asian economies and what it means for investors. (6-minute read)
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Where can I find uncorrelated sources of income?
This paper, written by Kerry Craig, discusses how alternatives and core real assets can help investors increase diversification in their portfolios and generate uncorrelated sources of income. (4-minute read)
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RMB (Remember) the longer-term structural support to Chinese Yuan resilience
This paper, written by Marcella Chow, discusses our long term views on the Chinese Yuan and its investment implications. (4-minute read)
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Piecing together the rate mosaic
This paper, written by Clara Cheong and Jordan Jackson, discusses our expectations for U.S. interest rates and what it means for investors. (6-minute read)
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Things to watch out for that would reinforce confidence on Chinese equities
This paper, written by Tai Hui, discusses the latest development in China's policies, and what investors should look out for going forward. (4-minute read)
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COVID-19 resurgence weighs on Chinese economy and market
This paper, written by Chaoping Zhu and Marcella Chow, discusses the market and economic impact of the latest COVID-19 wave in China. (4-minute read)
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The glide path to lower inflation
This paper, written by Clara Cheong and Adrian Tong, discusses the key drivers within the transitory and sticky components of inflation and presents our thoughts around their paths lower. (6-minute read)
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How should investors position for a yield curve inversion?
An inverted yield curve driven by short rates rising more than long-term yields has preceded every US recession since 1960 and is therefore a closely watched metric among investors regarding the outlook for the economy and markets.
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Will surging energy prices create stagflation?
This paper, written by Kerry Craig, looks at how recent events have impacted stagflation impulses in different regions, and the implications for investors. (6-minute read)
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Answers to the key investor questions on the Russia/Ukraine conflict
As the events in Ukraine continue to unfold, this note seeks to answer the economic and market questions from investors around the world. (6-minute read)
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A new supercycle – the clean tech transition and implications for global commodities
A forced and rapid energy transition is under way. Discover what impact this will have on commodity markets and clean energy investment opportunities.
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NPC preview: stronger policy support to be expected
This paper, written by Chaoping Zhu, discusses our expectations for the outcome of China's National People's Congress meeting and the investment implications. (4-minute read)
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How would international equities perform during a U.S. boom-bust recession?
In both a U.S. led boom-bust recession and global synchronous growth, international equities could outperform, suggesting a key role for the asset class in portfolio construction.
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4Q21 U.S. earnings update
Fourth quarter earnings are off to a solid start and the more cyclical sectors are leading the charge. (4-minute read)
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Elevated oil prices could stay for a while
Geopolitical tension in Europe, strong demand recovery and weak supply growth are all contributing to higher oil prices. (4-minute read)
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Protecting against inflation: Part 3 – Protecting your capital
Explore how investors can hedge against inflation to protect their capital in the next cycle with the help of alternatives and cyclical sectors.
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What to expect in China from the Year of the Tiger?
2021 was a year of steady reform introduction by Chinese authorities, focused on the long-term goals of improving the quality of growth and on addressing non-economic priorities like inequality, leverage, and decarbonization.
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The short road to tighter policy
This paper, written by Kerry Craig and Jordan Jackson, looks at the outcome of the January FOMC meeting and implications for different asset classes. (8-minute read)
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Protecting against inflation: Part 2 – The labour market is key
Today, there are more job openings than there are unemployed workers. Explore what impact a tight labour market could have on inflation in 2022.
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What higher U.S. rates mean for markets
This paper, written by Kerry Craig, looks at the potential path of U.S. rate hikes and implications for different asset classes (6-minute read)
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Amid weakening data, policy easing to be expected in China
This paper, written by Tai Hui and Zhu Chaoping, looks at recently released 4Q21 China economics data, inducing more monetary and fiscal stimulus, and the investment implications. (4-minute read)
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Protecting against inflation: Part 1 - Storm in the ports
Inflation is standing at record levels across many markets. Explore our framework for tracking the impact of supply chain disruption on inflation in 2022.
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Too Hawkish Too Fast?
This paper, written by Clara Cheong, discusses the recent turn to hawkishness of developed market central bank policies and the investment implications.
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Chain Reaction
This paper, written by Clara Cheong and Adrian Tong, looks at our deep-dive analysis into the forward-looking demand, supply chain issues, inflation and their investment implications. (4-minute read)
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What were the takeaways from China’s Central Economic Work Conference?
This paper, written by Zhu Chaoping, discusses China's recent Central Economic Work Conference and its investment implications.
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How should Asian investors react to the Omicron variant?
This paper, written by Tai Hui, discusses the potential impact of the Omicron variant and the investment implications for investors.
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Why does Japan deserve Asian investors’ attention?
This paper, written by Tai Hui, discusses the recent developments in Japan market, and several fundamental reasons that investors should pay attention to the investment opportunities it could potentially bring.
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Will the COVID-19 resurgence derail global recovery?
This paper, written by Chaoping Zhu and Kerry Craig, discusses the impact of the recent COVID-19 resurgence in China and other regions, and what it means for investors.
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COP26: Not a failure, not a success
COP26 saw significant announcements in areas such as coal, methane and deforestation, yet progress fell short of the scale required to give us confidence that disruptive climate outcomes can be avoided. Physical climate risks warrant careful consideration for long-term investors.
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Where do we stand on infrastructure spending?
From our vantage point, it seems like a given that the President will sign the bipartisan bill into law. Looking at the budget reconciliation package, a deal will get done but it may come down to the wire.
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U.S. 3Q21 earnings: Supply pains
Despite a slowdown in 3Q21 economic growth, corporate profits have been better than expected. Investors should use profits as a guide, as rising interest rates could pressure multiples and leave earnings as the main driver of returns.
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Are all global central banks on the move?
Investors should not paint all central banks with the same brush stroke as normalization will come in different shades: some central banks are already or close to being on the move, others will remain somewhat patient until next year, while others will remain firmly on hold.
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What is the likelihood of a central bank policy mistake?
This paper, written by Kerry Craig, Ian Hui and Gareth Lam, discusses whether or not the Federal Reserve and the Bank of England are hiking rates too slow or too fast, and what it means for investors.
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Could the Fed turn more hawkish on monetary policy?
This paper, written by Tai Hui, discusses the potential path of Fed monetary policy and the investment implications for investors.
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What are the implications from China’s 3Q 2021 GDP data?
Tai Hui, Chief Market Strategist Asia Pacific, and Zhu Chaoping, Global Market Strategist, discuss the potential investment implications of the newly released 3Q21 GDP data of China.
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Are we entering a period of stagflation?
Stagflation has become a hotly debated topic among investors as inflation expectations rise and growth expectations fall. This paper, written by Kerry Craig, discusses our views on the topic and what it means to investors.
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Getting ahead of COP26 and what it means for investors
Discover why COP26 is important for investors. Explore the potential investment implications that could come with new climate objectives and commitments.
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What is the market impact from elections in Germany and Japan?
This paper, written by Tai Hui, discusses the market impact of the elections in the third and fourth largest economy in the world, and what this means for investors.
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How to navigate the three challenges in China?
This paper, written by Tai Hui, discusses the major challenges faced by China equity and fixed income market, and their investment implications.
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The implications for investors of the German election
Germans head to the polls later this month to elect a new government. With the race to replace Angela Merkel as Chancellor still uncertain, Global Market Strategist Tilmann Galler sets out the policy agenda of the main parties, considers the most likely coalition scenarios, and looks at how the election may impact the outlook for the German economy and markets.
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What could trigger a market correction?
This paper, written by Tai Hui, discusses the possible triggers for a U.S. market correction, and what this means for investors.
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Will disappointing payrolls derail the taper?
This paper, written by Kerry Craig, discusses the recently released U.S. payroll statistics and potential impact on the possibility and path of the U.S. QE tapering policy rollout.
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Are Asian central banks turning hawkish?
This paper, written by Tai Hui, discusses the near-term possibility that Asian central banks could look to normalize their monetary policy, and what this means for investors.
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How would QE tapering impact on investment?
This paper, written by Tai Hui, compares the 2014 tapering with what is happening with U.S. monetary policy now, and what this means for investors.
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U.S. 2Q21 earnings
While it may be tempting to chase recent performance, we continue to anticipate that the second half will see interest rates move higher, repricing more in-line with the above-trend pace of economic activity that currently characterizes our forecasts. This should be supportive of cyclical assets broadly, and allow value to outperform growth.
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Not growth, not value, but income
This paper, written by Ian Hui, discusses the importance of income generation in the face of uncertainty and volatility.
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What now for Chinese equities?
This paper, written by Tai Hui, discusses the economic policy insights provided by the recent Politburo meeting, and what this means for investors.
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How should investors view the recent Chinese equity sell-off?
This paper, written by Chaoping Zhu, discusses the Chinese new reforms and the subsequent selling pressure in Chinese equities, and what this means for investors.
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What are the latest inflation data telling us?
This paper, written by Tai Hui, discusses what investors should make of the strong recent inflation data, and what it means for their investments.
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What are President Biden’s policy priorities?
This paper, written by Tai Hui, discusses the implications of newly-elected President Biden's policies, such as those regarding COVID-19 and China.
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Can China sustain its strong economic momentum?
This paper, written by Chaoping Zhu, discusses the outlook on China following its recent economic data releases and fresh outbreak of COVID-19 infections.
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Should investors worry about the recent rise in Treasury yield?
This paper, written by Tai Hui, discusses the implications of rising Treasury yields on inflation, the U.S. dollar and overall economic recovery.
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What are the implications of China's inclusion in the FTSE WGBI?
This paper, written by Alex Cheung and Ian Hui, discusses the outlook on the Chinese fixed income market following FTSE Russell’s decision to include China in its World Government Bond Index.
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Does re-opening mean re-orienting equities?
This paper, written by Kerry Craig, discusses the improving market sentiment and the outlook on equities.
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Will the Fed cause inflation?
The balance sheet of the U.S. Federal Reserve (Fed) has increased by 2.9 trillion USD since the start of March, meaning that in just over eleven weeks it has grown more than it did in the five years following the Financial Crisis.
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How will COVID-19 affect Sustainable Bonds?
Global governments have been swift and bold in supporting their economies, building a bridge to get consumers, small businesses and corporates over the present abyss to the other side. Given the unknown breadth and depth of the abyss, more stimulus may be required.
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Income hunting: If life was tough before, it’s even tougher now
While dividends in some regions are likely to face pressure in the coming months, now is not the time to give up on equities as a key source of income for multi-asset portfolios.
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What are the arguments for investors to stay invested in long-dated Treasuries?
This paper, written by Tai Hui, provides an update on fixed income investment opportunities.
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What can we expect from the National People’s Congress?
This paper, written by Chaoping Zhu, provides a preview of China’s expected economic policies ahead of the National People’s Congress.
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COVID-19 shows ESG matters more than ever
The COVID-19 crisis is causing short-term ESG repercussion and longer-term shifts. Find out why sustainability has never been more important for investors.
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Does a slowdown in new infections mean the worst is over?
Investors are keenly monitoring the number of new infections around the world to gauge whether the COVID-19 outbreak is under control.
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The Great Glut: A historic supply and demand shock in the oil market
Rising production and collapsing demand due to the COVID-19 pandemic is causing an unprecedented glut in the oil market. As a result, we are currently witnessing a pronounced supply and demand shock that has sent oil prices to a multi-year low.
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How vulnerable are emerging markets?
Spreads on emerging market (EM) bond yields have widened to levels not seen since the global financial crisis as concerns grow about the size of the economic downturn.
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Can oil prices recover if there is a deal between OPEC and Russia?
Oil prices collapsed in early March due to the price war between the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and Russia
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China set to advance stimulus efforts
As governments around the world step up their fiscal packages to counter the economic fallout from the COVID-19 outbreak, the Chinese government is also following the same path.
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A COVID-driven spike in claims
Initial claims for unemployment insurance surged to the highest level ever: 3,283,000, spiking from a slightly revised 282,000 last week.
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The COVID-19 Relief Bill-Holding the Economy in Suspended Animation
This paper, written by Dr. David Kelly, reviews the U.S> relief bill and its investment implications.
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What is the Fed doing and what does it mean for fixed income?
The U.S. Federal Reserve (Fed) has pulled out its alphabet bazooka in an effort to ensure sufficient liquidity and the smooth functioning of financial markets, while also providing credit to businesses that are affected by the spread of COVID-19 and the stall in global economic activity.
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The Fed’s aggressive actions to restore market stability
In the past two weeks, the traditional negative correlation between equities and government bonds has broken down.
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Will the Fed’s shock and awe work?
The U.S. Federal Reserve (Fed) opted for another surprise rate cut this morning (March 16, Asia time), instead of waiting for the March 17-18 Federal Open Market Committee meeting.
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What does the latest oil price collapse mean for investors?
It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.
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How low can U.S. Treasury yields go?
Worries about the spread of the COVID-19 virus continued to grip markets this week.
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Equity markets fall into correction
This paper, written by Tai Hui and Kerry Craig, addresses the latest equity markets’ correction and its investment implications.
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Could the COVID-19 outbreak derail Asian economic growth?
The good news is that the number of new confirmed COVID-19 cases in China is coming down and that more people are now recovering than getting infected.
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What happens if the Fed tries to normalize its balance sheet again?
The U.S. Federal Reserve (Fed) has become a dominant player in the bond market through successive rounds of quantitative easing (QE).February 19, 2020
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Could we see more monetary easing by Asian central banks?
The economic fallout from the Coronavirus outbreak is expected to become more significant for the rest of Asia in the weeks ahead.
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What can the Chinese authorities do to protect growth from the outbreak?
China will also need to start addressing the economic fallout soon, as businesses face significant pressure from disruption to consumption.
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Is the U.S.-China trade war over?
Policymakers on both sides of the Pacific have emphasized that they view their work as incomplete and that several issues remain un-addressed.
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Should investors still worry about US-China trade?
The U.S. and Chinese governments gave markets an early Christmas present when they agreed to a partial trade deal. However, much will depend on the details.
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