

Navigating Trump Tariff Policy, The Outlook for Emerging Markets
Nov 27, 2024
Ben Luk, a Senior Multi-Asset Strategist at State Street Global Markets, shares his insights on the complexities of Trump's tariff policies and their impact on emerging markets. Stephen Quattri, an EM Equity Portfolio Manager at Morgan Stanley Investment Management, discusses the economic outlook for Asia, highlighting the need for stimulus in China. They explore investment strategies, potential growth in emerging market equities, and the optimistic trends in sectors like healthcare and retail, emphasizing a country-specific approach to investment.
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Impact of Trump's Policies
- Trump's policies will likely benefit the U.S. and negatively impact the rest of the world, especially emerging markets.
- Despite this, some emerging markets in Asia, like Indonesia, are less reliant on the U.S. and offer investment opportunities.
Inflation and Fed Rate Cuts
- Inflation expectations and term premium drive yield pricing. U.S. domestic factors like labor market strength and sticky inflation will influence the Fed's rate cut decisions.
China's Deflation and Credit Problems
- China's deflation, driven by lack of pricing power and consumer spending, signals deeper credit problems.
- Stimulus announcements boost sentiment but don't address underlying issues, requiring more substantial measures.