Important themes for the rest of 2019
The most important one is the US-China trade war, which is clearly adding some uncertainty to the market. It's contributing to a slowdown in economic momentum globally and it's also pushing central banks to U-turn on some of their policies as we've seen with the Fed earlier this year, and we're also seeing the ECB signalling further easing to come. So clearly all of this has to be taken into account. There's the yield curves inverting which is also unnerving investors and that's a big talking point. The second focus of course, is Brexit. There is uncertainty there, it will impact the UK economic momentum, but also the European economic momentum.
Which countries or sectors offer the best opportunities?
We don't look at countries and sectors specifically, but looking at global equity markets, we think emerging market equities look attractive and that's where we're spending quite a lot of our research efforts to find attractive stock ideas. Ultimately, investors know that we're looking at three megatrends (demographic change, the future of technology and resource scarcity), in the long term and that's where we’re focusing a lot of our research work.
Are any geopolitical factors affecting your outlook?
The tariffs are not helpful in terms of pushing prices up for the consumer and therefore, triggering a slowdown in demand. In the mid-term and long-term, however, we think there are still very strong deflationary currents going on in the economy and therefore we're spending a lot of time looking at industries that have got lower disruption risk and finding companies that have got strong pricing power in this environment, because that will be the way to find the winners in the space.
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