Multi-Asset Investing: Despite risks, growth assets have room to run

Sunny Ng

An array of cross-currents now confront global markets, but there are positive consequences to the challenges we now face. Take recent trade tensions, for example. Having weakened confidence in pockets of Asia and Europe, they have yet to do so in the US. In a reversal of its deleveraging stance, China now supports tariffs, currency weakness, and monetary and fiscal thrusts. Domestic growth has become a priority to build a buffer against trade, yet re-leveraging China is risky and cannot go on for long given the high degree of existing leverage. While trade-related risks have risen, valuations have reset, and financial conditions remain accommodative.