We point out that although both rising trade tensions and the Fed are to blame for the shakeout in global stocks, the Fed could be the more important and insidious reason for the spreading weakness in global stock prices.
There is increasing evidence that as the U.S. mini-economic boom begins to crest, the risk of a Fed policy overkill is escalating. We are cutting equity exposure and overweighting bonds versus equities.
We also discuss the financial and economic ramifications of the trade spat between the U.S. and its trading partners and provide a roadmap for investment strategy in the coming months.
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Chen Zhao, Chief Global Strategist
Chen Zhao is Founding Partner and Chief Strategist of Alpine Macro. From 2015 to 2016, he was Co-Director of Macro Research at Brandywine Global Investment Management. Prior to Brandywine Global, Chen spent 23 years at BCA Research. As a Partner, Managing Editor and Chief Global Strategist, Chen developed and wrote BCA’s China and Emerging Markets publications in the 1990s. Chen became the firm’s Chief Global Strategist in the 2000s and was the author of BCA’s flagship publication, Global Investment Strategy from 2005 to 2015.
Alpine Macro is an independent global investment research firm based in Montreal, Canada. The company focuses on analysis of major macro-economic forces around the world, specializes in forecasting trends and directions of global financial markets, and provides recommendations on asset allocation and investment strategy. The principals, Chen Zhao, Tony Boeckh and David Abramson, have many decades of experience in analyzing the global economy and financial markets. They are supported by an experienced team of Analysts with expertise in the U.S. economy, global financial markets, China and Emerging Markets.