Tariff Standoff Intensifies Near-Term Risks in Asia
Global equities tumbled nearly last week following the announcement of US tariffs on April 2, with the rout continuing into Monday, April 7.
Authored by: Vivian Gan
Are Indian Equities an Attractive Overweight After the Recent Sell-Off?
No, we do not think so. India’s economic growth is set to continue moderating, which may lead to further downgrades to stretched earnings growth expectations.
Review of Market Performance: Calendar Year 2024
Most risk assets enjoyed strong returns in the calendar year (CY) ended December 31, 2024. US equities led on better-than-expected economic data and AI-related growth.
2025 Outlook: Public Equities
We expect developed markets value and small-cap equities to outperform, given our economic views and their steep valuation discounts. Regionally, we believe US equity performance will not match the level set in 2024, allowing European, Japanese, and emerging markets equities to perform more in line with broader developed markets. Within emerging markets, strong Indian equity gains should moderate, while we doubt Chinese equities will collapse. At the same time, we expect long/short equity strategies will perform better than typical.
2025 Outlook: Currencies
We expect the US dollar rally will ultimately cool, with early strength giving way to modest weakening. Meanwhile, gold returns are likely to moderate in 2025 after a surge in 2024. Emerging markets’ use of stablecoins should support positive crypto returns, driving blockchain innovations and investment opportunities.
Asia Insights: Seeking Stable Returns
With the global economy showing signs of cooling and Chinese economic momentum remaining weak, the outlook for Asian markets is increasingly mixed.
Will Federal Reserve Rate Cuts Trigger Outperformance for Chinese Equities?
No, Federal Reserve rate cuts alone are unlikely to trigger sustained outperformance for Chinese equities.
Review of Market Performance: Fiscal Year 2024
Most risk assets enjoyed strong returns in fiscal year ended June 2024. Developed markets equities led on better-than-expected economic data and the anticipation that central banks would begin easing monetary policies.
2024 New Zealand Outlook: A Slow Road Ahead
Our outlook for New Zealand is mixed in 2024. We expect economic growth and equity market to remain muted. In contrast, we remain positive on New Zealand government bonds.
Review of Market Performance: Calendar Year 2023
Risk assets enjoyed mostly positive returns in CY 2023. Developed markets equities led as fears over the severity of a possible recession moderated and inflation declined.