Beyond the recovery hump

- "For much of 2010, our strategy has been to position for the global cyclical recovery. A powerful recovery did occur with global manufacturing up 12% from its recession low. Economic data is past the recovery hump. The cyclical trade is now mature. Within EM countries, we are rotating back to domestic demand. Our OW in the cyclical sectors of technology and transportation is more modest than the large UW in commodities and energy."
- "We downgraded Mexico and South Africa from overweight to neutral and upgraded ASEAN to overweight on 15 July."
- "China’s economic growth is slowing. Real GDP growth eased to 7.2% QoQ in 2Q from 10.8% in 1Q10. China's PMI fell for the third consecutive month to 50.4. Policy clearly favors consumption over FAI. But the consumer sector is only 11% of MSCI China. Materials and
energy constitute 20% of the index. Policy risk and margin pressure due to national service are the key medium term drivers for our UW in China, but a policy relief rally is possible as evidence of the slowdown builds. Fast money may wish to be neutral in China in a commodity
JPMorgan Emerging Markets Equity Strategy 20100719

No comments:

Post a Comment