Let me get you started with this chart on a B TV library because we can actually see how broader emerging markets are under
pressure as opposed to the S&P 500. And if you see the level of this count versus U.S. stocks you see those levels that we
haven't seen in about 20 years or so and with really that tightening move in advanced economies and capital outflows
potentially from Asia. Are there any other markets or economies that could be a little bit more resilient in this environment.
Well I think if you look at across the whole spectrum of EMEA the markets they're facing similar pressures. Basically
normalization of policy by the Fed fears about inflation and which it will impact outlook for the region in Asia. Also in
other markets there. And on top of that investors are still quite concerned about Chinese regulatory tightening especially
on the tech sector which I don't think is finished although the worst may be behind us. So these short term factors will keep
pressure on Asian markets especially the tech sector until we see
a more benign forces coming in which probably will happened after the middle of next year. Until then we are likely to see
more pressure on Asian markets which will keep these markets Grinch funded with a downward fighters. So where do you go in
the meantime. Then I guess you avoid those sectors that are being hit by policy
divergence between the region and the U.S. and also avoid those sectors that are
under regulatory scrutiny. Obviously those would be the e-commerce and the tech sector there. There is a plays in the
short term for seats having vehicles like high grade bonds
in China policy bonds and CBT and things like that. Look for the youth picked up across markets in the short term as a shelter
before we see benign stock market forces come back. When you take a look at opportunities that come from policy
diverges so central banks begin to normalize. What jumps out at you as some of those strategies are the. I think if you go
across the Pacific and go into the U.S. short term I think there's still more downside for US bonds because of the pricing
of pre-date by the US which is still not quite certain about retaining the tapering is quite certain already.
But on the other hand because of the strong growth in the U.S. and also reopening of the U.S. economy and so on and also the
most recent news about Mr Biden's one trillion dollar infrastructure plan has gone through. That will be a positive
forces for propelling the U.S. stock market and higher. So I think long long US stocks at least in the next half a year or
so. And then for each market as I mentioned earlier there will be still a short term downward pressure. But then if you look
beyond the short term horizon into next year likely in the second half of next year we'll see a reasonable recovery of
Asian stocks especially Chinese stocks in the tech sector because of the further easing by the Chinese. Authorities will
help stabilize China's economy which in turn will help Asian growth outlook. And also the Chinese tightening campaign should
fade by around middle of next year which in turn will will give the Chinese DAX tech stocks are pushed for recovery and riffing
on the supply chain. Crisis has been a popular trade particularly when it comes to the enthusiasm around
semiconductor and chip stocks. Does that continue what he the disruption is a wildcard because the market actually expected
the disruption to finish by now but then is still going on. The problem is that this Covid issue is due around us with new
barriers and merging and also I think so. So I think the the transitional inflation environment which is tied to the supply
disruption story may have been lengthened but I think in the end this disruption is still going back to normal.
A lot depends on corporate development and assuming there is no more significant infections when going forward in the next six
months or so. And was new vaccines coming out helping cure the disease. It well should get back to normal within the next six
months or so. So this trade disruption story should fade in the coming months which will bring back to normal lives. And then
all this benign conditions for Asian stocks you or you measure market stocks to recover. Well it will come.