Beyond Markets

The first half of the year has provided investors with ample food for thought, but what’s next and how should investors be positioned for the second half of the year? In this episode of the Beyond Markets podcast, Christian Gattiker, Head of Research, and Mark Matthews, Head of Research Asia, discuss with Helen Freer the impact of the US administration on the global economy, the importance of adopting a global investment approach, and the current opportunities, particularly in the equities and fixed income space.(00:33) - Introduction (00:53) - US policies and what it means for the global economy (03:33) - Risk of a recession (05:03) - Expectations for the US Federal Reserve (06:31) - Investing in equities - diversify (07:44) - Why focus on mid-caps? (10:01) - Opportunities in India and China (11:28) - Why do we like Japan? (12:32) - The importance of stock-picking in the current environment (14:40) - Should gold form part of an investor’s allocation? (15:47) - Where does the US dollar go from here? (17:04) - Is the Swiss franc the ultimate safe-haven currency? (17:44) - What does the global trade policy uncertainty mean for credit spreads? (18:55) - Opportunities in the fixed income space (19:44) - What do we prefer in terms of duration? (20:29) - Opportunities in Euro bonds (20:52) - What’s in store for emerging market debt? (21:34) - Next Generation: a barbell strategy with Extended Longevity and Future of Finance (23:41) - Next Generation: Future Cities (24:15) - Summary (25:29) - Conclusion Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.

Despite the latest US job data showing resilience, underlying cracks are emerging—highlighted by downward revisions to job growth figures. The stronger-than-expected headline number adds conflicting pressure on the Federal Reserve, complicating the outlook for rate cuts. At the same time, rising yields in Japan and growing concerns over the US fiscal trajectory are prompting investors to seek diversification. With emerging markets and Asian bonds showing strength, the case for quality bonds with moderate duration continues to grow.This episode is presented by Magdalene Teo, Head of Fixed Income Research Asia at Julius Baer.

The shift in the way the US trades with the world is fundamentally leading to higher inflationary pressures, and in turn causing a weakening US dollar. This has significant implications for investors, and is a risk to the concept of US exceptionalism. In such an environment, we see value in diversifying away from the US in sectors that can be easily replaced. The US, however, remains a leader in the technology sector. In the fixed income space, elevated rates are likely here to stay, which means going for long duration is possibly not ideal. This episode, presented by Bhaskar Laxminarayan, Chief Investment Officer Asia at Julius Baer, explores these themes and provides insights for investors navigating this complex landscape.

In this engaging discussion, Kevin You, a seasoned Portfolio Manager at Allianz Global Investors, shares insights into the promising landscape of Chinese equities. He highlights potential policy support and improvements in corporate governance as key drivers for investment. The conversation delves into the state of the Chinese property market, the impact of global portfolio shifts, and the exciting opportunities in AI and robotics. You also addresses emerging trends in semiconductor technology, emphasizing China's push for self-sufficiency.

Mathieu Racheter, Head of Equity Strategy Research at Julius Baer, shares his insights on the unusual Q1 2025 earnings season shaped by tariff disruptions and market uncertainties. He highlights how most companies exceeded expectations despite cautious investor sentiment. Racheter discusses the impacts on capital expenditures, particularly in the semiconductor sector, and offers strategies for navigating a volatile technology market. He also delves into opportunities in undervalued regions and the shifting dynamics toward software investments.

US assets slumped last week, with the US dollar, Treasuries, and stocks selling off following President Trump's warning of fresh tariffs on the European Union. The pessimism on US assets is also reflected in recent data. The preliminary University of Michigan consumer sentiment index dropped to 50.8 from 52.2 in the month, and surveys show that Americans intend to do fewer road trips this summer despite falling gasoline prices.Investors are now seeing merit on diversifying out of the US, and gains have been seen in local currency stocks and bond markets. Local currencies have also performed well, with the weaker greenback creating opportunities for Asian central banks, such as Bank Indonesia and the Reserve Bank of Australia, to cut rates. In Hong Kong, the slump in the US dollar pushed the Hong Kong dollar towards the strong end of the band, prompting intervention from the Hong Monetary Authority (HKMA) to defend the currency peg. We expect more abrupt interventions from the HKMA from here, as investor positioning and flows are likely to weigh on the Hong Kong dollar and HIBOR.This episode is presented by Magdalene Teo, Head of Fixed Income Research Asia at Julius Baer.

In this episode of the Week in Markets, equities research analyst Louis Chua explores how the equity and debt markets have reacted to the 90-day truce in the trade war between the US and China, and what are some of the lingering concerns to watch over the next 90 days. Overall, while the financial markets have reacted with relief, we believe that the US fiscal situation remains far from being solved, and we would take advantage of the current opportunity to add diversifying exposure outside the US. In the long term, an end to US exceptionalism and foreign investors’ asset allocation decisions to diversify away from the US can have a significant impact to equity and fixed income markets.

The US and China have agreed to a 90-day truce in the trade war, following negotiations in Geneva. As part of the deal, the US will reduce tariffs on Chinese imports from 145% to 30%, and China will lower its duties on American goods from 125% to 10%. Markets have welcomed these developments, but key questions still remain about the implications for the economy and inflation. This uncertainty puts the Federal Reserve (Fed) in a tough spot, and we await more clarity on the Fed’s direction from Fed Chair Jerome Powell’s comments on 15 May.   In Asia, the India–Pakistan conflict has calmed following a US-mediated ceasefire. We note that historically markets have typically recovered within a month of previous India-Pakistan conflicts, and continue to monitor key indicators such as the Indian Rupee and Foreign Institutional Investor (FII) flows, as well as geopolitical developments.   This episode is presented by Chintan Bhindora from the Julius Baer Research Asia team.

Tune in for insights on the impact of recent elections on global markets. The discussion touches on how voter preferences for incumbents are shifting capital towards gold, European equities, and Chinese stocks. Historical trends favor a 'Sell in May' strategy, suggesting a reconsideration for risk-averse investors. With upcoming monetary policy decisions looming, market participants are in wait-and-see mode. It's a fascinating look at how geopolitical events shape investment strategies.

US markets rebound as optimism grows over trade talks and a softer stance from President Trump. Manufacturing indicators, however, hint at potential contraction, raising concern. Polls show a majority disapprove of tariffs, fearing inflation. Meanwhile, analysts predict rate cuts could materialize as recession risks rise. Insights into investment strategies and currency movements enrich the discussion as the landscape shifts.