Thursday, 23 May 2019
Slowing world trade is causing global GDP and earnings growth to be revised downward. The US-China trade war continues to dominate headlines, but investors are realising that its impact on both DM and EM economic growth has been exaggerated. We expect rationality to prevail and for the dispute to be resolved in due course. Until then, there is scope for monetary and fiscal measures in China to support growth to achieve target levels. GDP and earnings growth in EM’s is superior to Developed Markets, yet after strong underperformance in 2018, and even after a rally in Q1 2019, Global Emerging Markets valuation is still on a large discount to Developed Markets.
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