Weekly Comments

our Investment Strategist highlights that President Trump is becoming increasingly vocal in his opposition to US Federal Reserve Chair Powell – and insisting he has the power to remove him from office. If Chair Powell is ousted, then we assume a new risk premium will be added to US assets, as central bank operational independence ends. The dollar may weaken, Treasury yields may increase and US assets in general may drop.​ ......

22 Apr 2025

Weekly Comments

our Investment Strategist highlights that markets are showing levels of volatility in line with previous crises like the Covid-19 Pandemic, Global Financial Crisis and Technology Bubble of early 2000’s. Real damage is being done in that firms are likely to pause capital expenditure plans until a more stable policy backdrop emerges in Washington. Some data may reflect front loading and will not be indicative of underlying trends......

15 Apr 2025

Weekly Comments

our Investment Strategist highlights that Trump’s “Liberation Day” tariffs raise the effective weighted US tariff rate to the highest it has been since the 1910s. This puts us in unchartered territory. The extent of the economic repercussions will depend on the durability of the higher tariffs, and whether Trump chooses to add more exemptions. As President, Trump has the unique authority .....

8 Apr 2025

Weekly Comments

our Investment Strategist highlights that the White House is expected to release its new import tariff regime. This likely represents the largest increase in US tariffs since the 1930’s, and may pose meaningful downside risks to global growth while boosting US inflation pressures. In contrast to 2017, the US equity market has substantially underperformed peer markets during the first 50 days of President Trump’s second term....

1 Apr 2025

Weekly Comments

our Investment Strategist highlights that notes that the macro calendar is relatively light, with predominantly second tier releases, except for US durable goods orders for February 2025l.​ In any case, the macro news will likely be overshadowed by the anticipation of sweeping US import tariffs on many / most major US trading partners, expected to come into effect on April 2....

25 Mar 2025

Weekly Comments

our Investment Strategist highlights that notes that equity markets are displaying significant volatility as US tariffs come into effect, with household sentiment (University of Michigan & Conference Board) collapsing, and inflation expectations rising at the same time. For now, we see a challenge to sentiment, but high frequency consumer discretionary metrics still point to strong spending that is acting as a backstop ....

18 Mar 2025

Weekly Comments

our Investment Strategist highlights that volatile policy-making in Washington DC is beginning to wear upon forward-looking recession prediction statistics. Consensus has started to downgrade the US growth outlook as a result. Will President Trump push the economy into recession so soon? Risks are rising, but with low unemployment, a strong corporate sector and a Federal Reserve that has room to cut rates, it is too soon to say....

11 Mar 2025

Weekly Comments

Our Investment Strategist notes that tariffs on Canada and Mexico are set to be enacted. A further 10% tariff on Chinese goods will also be put in place. This represents an extreme experiment in terms of how economies, households and businesses will react. The good news is that the US has solid “initial conditions”, but this can change quickly, and inflation surveys and market pricing are already pointing to higher CPI ahead....

4 Mar 2025

Weekly Comments

Our Investment Strategist highlights Japanese inflation, which tells the story of a new economy; prices and wages are rising, alongside aggregate consumption, even with a shrinking population. This means that over time, it may be less ‘risky’ for the Bank of Japan to continue with rate hikes. Japanese equities are our most preferred in Asia...

25 Feb 2025

Weekly Comments

Our investment strategist highlights that US corporate profit is set to accelerate in 2025, setting the stage for broad earnings recovery. China Internet Sector will outperform this year too. We also note that US Treasury yields have been volatile recently due to uncertainties from Trump's policies...

11 Feb 2025

Weekly Comments

Our investment strategist highlights that the new US Administration is moving very quickly via Executive Orders, which are likely to be followed up with legislation. We believe the AI theme remains intact and demand for substantial infrastructure upgrades will continue, as leading edge Large Language Models (LLM) are still required in the development process.....

4 Feb 2025

Weekly Comments

Our investment strategist expects the financial information services industry to benefit from rising financial market activities.Higher asset values and stronger deal pipelines at global investment banks are expected to create a more favourable environment for information services firms focusing on data feeds and market intelligence. (comments to resume on 4 Feb 2025)....

21 Jan 2025

Weekly Comments

Our investment strategist addresses concerns about whether equities can continue to perform after two years of remarkable gains, as seen in 2023 and 2024. Empirical evidence indicates that after trading at a P/E ratio of 22x, the S&P 500 typically delivers returns ranging from +2% to -2% over a ten-year period. Deregulation has been a key component of Trump's policy platform....

14 Jan 2025

Weekly Comments

Our investment strategists emphasize that in the stock market, historical data suggests that after nearly two years of close to a 20% increase, the S&P 500 index may experience adjustments in 2025. They also highlight that artificial intelligence remains a structural theme worth keen attention. In the bond market, we expect interest rate volatility to continue and reaffirm our preference for short-term bonds over longer-term ones...

7 Jan 2025

Weekly Comments

Our investment strategists emphasize that last week, U.S. stocks hovered near historical highs. Ahead of anticipated further rate cuts by the Federal Reserve, the yield on the 10-year U.S. Treasury surged to nearly 4.40%. Even if the Federal Reserve lowers rates further in 2025, the market has accepted our view that high inflation will mean policy rates remain at elevated levels compared to pre-pandemic times...(New issues to be continued in 2025)

17 Dec 2024

Weekly Comments

Our investment strategists emphasize that our core scenario is for the U.S. to achieve a soft economic landing, with the Federal Reserve gradually lowering interest rates through 2025. One of the main risk factors is that inflation could prove to be more persistent. The Federal Open Market Committee (FOMC) updated its Economic Projections Summary during the December meeting....

10 Dec 2024

Weekly Comments

Our investment strategists emphasize that higher yields are driven by rising inflation expectations, reduced recession risks, and potential risk premiums associated with increasing federal government debt. The elevated yields on U.S. Treasury securities, have collectively pushed up the U.S. dollar index. It could also lead to currency devaluations in exporting countries, similar to the situation with the Chinese yuan between 2017 and 2019. ...

3 Dec 2024

Weekly Comments

Our investment strategists emphasize that, in addition to the approval of 6 trillion yuan in fiscal stimulus measures by the National People's Congress in China, we have also observed strong domestic consumption momentum during the "Double Eleven" shopping festival. Asia continues to be a key driver of global growth, supported by India's robust cyclical and structural growth....

26 Nov 2024

Weekly Comments

Our investment strategists emphasize that enhancing portfolio resilience to address geopolitical and policy risks remains crucial. Although bond spreads have narrowed and price increases have been limited, as interest rates decline, bonds are expected to outperform cash, particularly investment-grade bonds, which still offer attractive yields. A diversified asset strategy can help investors capture growth opportunities while managing downside ....

19 Nov 2024

Weekly Comments

Our Investment Strategist emphasizes that during the presidential campaign, Trump made several policy commitments, with tax, immigration, and trade policies being three key areas of investor focus. His stance on these policies could increase price pressure. It is anticipated that tax cuts will stimulate the economy, extend the current growth phase, and have a positive impact on risk assets. However, this may reduce the necessity....

12 Nov 2024

Weekly Comments

Our Investment Strategist emphasizes that the seven key Swing States are currently under scrutiny as markets seek insights into long-term earnings growth. There are likely some vote controversies. The FOMC is set to hold its November meeting this week, with an announcement expected early Friday morning, November 8th, HK time. We anticipate a 25 basis points rate cut...

5 Nov 2024

Weekly Comments

Our Investment Strategist emphasizes that the U.S. elections are just one week away, with market indicators suggesting that Trump may have the potential to secure a victory. In Japan, Prime Minister Ishiba of the Liberal Democratic Party has lost control of the Lower House following the snap elections held over the weekend. This situation is likely to lead to several weeks of negotiations, and we cannot discount the possibility of another election...

30 Oct 2024

Weekly Comments

Our Investment Strategist notes that the U.S. elections are just 13 days away. Current polling data indicates that both candidates are consistently within the margin of error. However, recent trends in the pivotal swing state of Pennsylvania suggest that Trump may hold a slight advantage. Investors should brace for a potential contested outcome, with the Supreme Court likely playing a crucial role...

23 Oct 2024

Weekly Comments

Our Investment Strategist holds the similar view as last week. Although there is surprise in core CPI, there’s no significant upside surprise, the Federal Reserve is poised for two more 25-bps rate cuts this year and there is no significant change to the market direct in the coming months. Our attention should shift to US Presidential Election instead...

16 Oct 2024

Weekly Comments

Our Investment Strategist highlights that the US jobs report for September surpassed expectations significantly. The recent hurricanes may have caused some data distortions, but they don’t fully account for the rebound in hiring. The unemployment rate has declined to 4.1%. Attention this week shifts to the CPI report. Unless there’s a significant upside surprise, the Federal Reserve is poised for two more 25-bps rate cuts this year...

9 Oct 2024

Weekly Comments

Our Investment Strategist discusses the rally in Chinese equities, noting that investors are optimistic about recent announcements aimed at easing borrowing costs for homebuyers. Additionally, unconfirmed reports of a CNY 2 trillion fiscal support package for households and local governments could boost consumption throughout 2024. With low valuations and light investor positioning, the current rally may have room to continue....

2 Oct 2024

Weekly Comments

Our Investment Strategist discusses the Fed's unexpected "jumbo" 50bps rate cut, which contrasts with our expectation and market consensus for a more measured 25bps reduction. This cut is being characterized as "assertive," and we anticipate that the next two FOMC meetings will each result in a 25bps cut. The market has consistently pushed back its predictions for a recession, a trend that has persisted for nearly 18 months...

24 Sep 2024

Weekly Comments

Our Investment Strategist highlights the FOMC meeting as this week’s key macro event. The interest rate decision will be announced at 2:00 AM (HK/SG time) on Thursday, and we maintain our baseline expectation of a 25bps cut. In terms of the US elections, opinion polls show a very tight race between Kamala Harris and Donald Trump, with a third debate looking highly unlikely. While Harris is generally viewed as having "won" ...

17 Sep 2024

Weekly Comments

Our Investment Strategist notes that the addition of 142,000 jobs in the US non-farm payrolls for August fell short of market expectations. However, this is not enough to alter our baseline view of a 25bps rate cut at the upcoming September FOMC meeting. We anticipate that this week’s CPI report will support this perspective. Regarding US equities, seasonal data indicates that the belief in September being a weak month for the S&P 500...

10 Sep 2024