On the Minds of Investors

LATEST COMMENTARY

Happy Earth Day!

Over the last 12 months, the global pandemic has shaken our lives in many ways. While good health and social interactions are probably top of mind for most of us, the environment and climate are also among our key concerns.

What is the inflation risk?

This paper, written by Kerry Craig, discusses the inflation outlook in the U.S. and around the world in the coming months and years, and what this means for investors.

How will the Fed’s decision on the Supplementary Leverage Ratio (SLR) impact markets?

For better or for worse, banks are required to meet various liquidity and leverage requirements. One ratio that measures a bank’s ability to absorb losses is the Supplementary Leverage Ratio (SLR). The SLR formula measures tier 1 capital, which consists mostly of common and preferred stock, as a percent of total leverage exposure.

Asia's decade: Getting ahead of the growth opportunity

Rapidly rising incomes in vast populations are set to make Asia the largest contributor to global growth in the 2020s. For investors, the opportunity looks too big to ignore.

Chinese equities market correction—why and what is next?

This paper, written by Marcella Chow, discusses the drivers behind the recent Chinese equities market correction, and how investors should prepare for what comes next.

Are emerging markets vulnerable to the recent rise in U.S. Treasury yields?

This paper, written by Tai Hui, discusses the impacts of rising U.S. Treasury yields and stronger U.S. dollar on different emerging markets asset classes.

Are commodities entering a supercycle?

This paper, written by Ian Hui and Gareth Lam, discusses the factors driving the recent jump in commodity prices, and whether they are entering a supercycle.

The case for ESG integration when investing in EM

Explore the strategies that can help investors maintain income and diversification in a post-Covid world of low interest rates and negative government bond yields.

A preview of China National People’s Congress

This paper, written by Chaoping Zhu, provides our forecast of what will be discussed and announced in China's National People's Congress on March 5, as well as its implications for investors investing in China.

Inflation worries and the rise in government bond yields

This paper, written by Tai Hui, discusses the recent rise in government bond yields on the back of market expectations of economic recovery in the U.S., upcoming fiscal stimulus and the prospects of high inflation, as well as its implications for different asset classes.

Why and how to re-think the 60:40 portfolio

The challenge of low government bond yields means investors must rethink the 60:40 stock:bond allocation. Discover where they can turn for diversification.

U.S. 4Q20 earnings season

This paper, written by David M. Lebovitz and Ian Hui, discusses our views on the U.S. 4Q20 earnings season so far and its investment implications.

How should Asian investors handle the current bout of market volatility?

This paper, written by Tai Hui, addresses the reason behind and our view regarding the latest market volatility and its investment implications.

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.

A fresh flock of doves

What does Biden's presidency mean for the global climate agenda?

Joe Biden’s presidency is expected to bring increased momentum on tackling climate change. Carbon intensity is likely to become an increasingly important metric in investment decisions.

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.

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.

What could upset a happy New Year?

This paper, written by Tai Hui, discusses the key market risks heading into 2021.

Should investors worry about inflation?

This paper, written by Tai Hui, discusses the outlook on central bank policies to address inflation concerns heading into 2021.

What are the implications of rising corporate bond defaults in China?

This paper, written by Marcella Chow and Chaoping Zhu, discusses the outlook on capital markets following a rise in Chinese bond defaults.

What does the end of the Fed’s credit facilities mean?

This paper, written by Kerry Craig, discusses the ending of various Federal Reserve credit facilities in a time of lower fiscal support and weaker economic activity.

Was the 3Q earnings season really that great?

Thsi paper, written by Ian Hui and Alex Cheung, analyzes the 3Q 2020 U.S. earnings results and the outlook for the COVID-19 pandemic.

Election 2020: Results and consequences

This paper, written by Dr. David Kelly and Meera Pandit, provides the latest update on the U.S. presidential election and its investment implications.

How should investors consider the impact of climate change on their portfolios?

This paper, written by Vincent Juvyns, looks at how investors can manage climate-related risks in their portfolios, while also driving real change.

What should investors do, given the latest surge in COVID-19 in Europe and the U.S.?

This paper, written by Tai Hui, discusses the recent rebound in COVID-19 cases and their implications on global markets.

China’s recovery on track

This paper, written by Chaoping Zhu, addresses the latest Chinese GDP data and recovering economy with its investment implications.

Are Chinese authorities worried about the Chinese yuan's strength?

This paper, written by Tai Hui, discusses the outlook on the Chinese yuan following its recent strong performance.

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.

What is the latest progress of China's economic recovery?

This paper, written by Tai Hui and Chaoping Zhu, discusses the outlook on China following recent economic data releases.

Why should I invest in equities when they are already so expensive?

This paper, written by Tai Hui, discusses the positive outlook on global equities despite high valuations.

Can the market bounce back?

This paper, written by Kerry Craig, discusses the longer-term outlook for equities following the recent sell-off of tech and growth stocks.

What does the Fed’s latest change in monetary policy framework mean for Asian investors?

This paper, written by Tai Hui, discusses the recent statement by the Federal Reserve and its implications on global markets.

What are the implications from the latest review of the U.S.-China Phase One Agreement?

This paper, written by Tai Hui, analyzes the recent discussion between the U.S. and China regarding the Phase One trade agreement.

Loss aversion: How does this impact investors now?

Asymmetry between losses and gains is actually a very powerful bias that influences decision making and how people invest and allocate in markets.

Where do we stand in the economic recovery?

Last week, we learned that the unemployment rate fell to 10.2% in July.

Will tensions between the U.S. and China keep rising?

This paper, written by Gabriela Santos, discusses the outlook for U.S.-China tensions amidst COVID-19 and the upcoming election season.

What are earnings forecasts telling us about the recovery?

This paper, written by Tai Hui, analyzes the S&P 500 earnings reports and forecasts and their implications on the recovery from the effects of COVID-19.

How should current conditions be reflected in asset allocation?

We revisit asset allocation views as the global economy appears to be in the early innings of recovery, but stares down the limitations to growth in a pre-vaccine world.

Is the U.S. dollar weakness here to stay? What should investors do?

This paper, written by Tai Hui, examines the recent decline of the U.S. dollar and its implications on global markets.

Could a second wave of outbreak derail economic recovery?

A number of countries have seen a pick-up in new infections in recent weeks. Instead of derailing the global economy and forcing another dip in economic activities, the latest outbreaks are more likely to dampen and delay the global economy making a full recovery.

Could the policy response to Covid-19 lead to a resurgence in inflation?

Central banks are printing money and governments are showering it round the economy. Government debts levels are eye-wateringly high. It's no wonder investors are questioning whether a resurgence in inflation is on the cards.

Is the Fed reducing liquidity?

The size of the U.S. Federal Reserve’s (Fed) balance sheet has started to shrink in recent weeks. Its balance sheet has declined 2.9%, or USD 210billion (bn), from its peak of USD 7.17trillion (tn) in June. Some investors are worried that the Fed is now intentionally dialing back its liquidity support and what the implication of this may be for markets.

Why should investors take a look at the Chinese fixed income market?

A consequence of the COVID-19 pandemic is that developed market central banks have pushed policy rates to zero, while engaging in asset purchases to keep bond yields low.

Does re-opening mean re-orienting equities?

This paper, written by Kerry Craig, discusses the improving market sentiment and the outlook on equities.

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.

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.

What are some of the long-term structural changes from the COVID-19 pandemic?

This paper, written by Tai Hui, provides an analysis of the potential long-term investment implications from COVID-19.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

How low can U.S. Treasury yields go?

Worries about the spread of the COVID-19 virus continued to grip markets this week.

Equity markets fall into correction

This paper, written by Tai Hui and Kerry Craig, addresses the latest equity markets’ correction and its investment implications.

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.

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

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.

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.

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.

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.