10th anniversary of Great Financial Crisis!
Another notable concern is the side effects of quantitative easing. The wealthy have benefited from central bank purchases of financial assets. This has widened the wealth gap and fuelled the rise of populist and nationalist-led regimes. The danger of such regimes is the higher chances of conflict within and between countries. Two years is an eternity for most of us "investors". Foreigners’ tolerance for U.S. government bonds despite a $1tr fiscal deficit will always be artificially high. The US dollar may be flawed, but it will be hard to lose its global reserve currency and trade settlement status unless a better liquid alternative is found. Therefore, for run on Treasuries to materialise, it needs to be accompanied by higher risk-free yields appearing out of Europe and Japan.
The backdrop for equities in Singapore is turning weaker. News flow is negative as the trade spat worsens. And as we enter U.S. mid-term elections on 6th November, we expect the market to trade even more cautiously. Other economic conditions are not encouraging. We can expect emerging-market economies to weaken as their currencies get pummelled. The slightest signs of higher imports or weaker trade balances will result in the selling pressure on their currencies. Near-term solutions for emerging markets will be contracting consumption and raising interest rates. In developed countries, with the exception of the U.S., Europe and Japan are stuttering. Our position is to remain defensive.
Taken from : https://s3-ap-southeast-1.amazonaws.com/investingnote-production-webbucket/attachments/bacedf0833b1872b35ade0330ca71a323684ba64.pdf?1537751340