In this quarterly Fullerton Investment View, Strategist, Robert St Clair, explains how the macro environment has become more challenging, why inflation is a concern, and asset classes and sectors which we continue to see investment opportunities.
The investment environment has become very challenging, as earnings growth is slowing while inflation has surged
We remain positive on global equities; earnings expectations are still significantly above trend, especially across Developed Markets
However, we have shifted to a negative outlook on Asian and Chinese equities
The most concerning downside risks to growth have emerged in China, as its industrial production and retail sales growth have slowed sharply. China’s regulatory crackdown and greater geopolitical tensions with the US, could drag on Asia
We remain negative on Asian corporate credit as there is likely to be less spread compression ahead, tighter liquidity, and more credit risks
We maintain our positive USD outlook, as positioning has become more supportive, and the US terms of trade has increased significantly
You can also hear from our Strategist Robert St Clair, who explains why inflation could be a problem, what to watch out for, and how our investment views have shifted.