Ain't no sunshine

- "August was a poor month for all risk assets. Equity markets declined as the slowdown in global growth raised concerns over the sustainability of the recovery. Economic activity was particularly weak in the US. High unemployment claims, extreme weakness in housing activity and lackluster consumer demand intensified fears of a contraction in US growth. But not all news was bad. The flurry of private sector M&A activity was a sign of cash rich corporates and strong balance sheets."
- "MSCI APxJ declined 2% outperforming MSCI World by 2%. Economic activity in EM Asia held up well. Domestic demand remained resilient and monetary policy largely accommodative. However, headline GDP growth slowed reflecting the weakness in external trade."
- "The ASEAN region continued its outperformance with Thailand, Malaysia and the Philippines the best performing markets. Strong economic growth combined with positive earnings revisions and low ownership (ex Indonesia), continue to drive these markets higher. Australia, Indonesia and China were the worst performers."
- "Sector performance reversed from July. The downshift in global manufacturing and the search for yield caused cyclical sectors to underperform; IT (-5%), Financials (-3%) and Materials (-2%) were the worst performers within APxJ. Consumer staples were up 2.6% largely driven by staples in China, India and Korea."
- "The Thai Baht and the Japanese Yen were the best performing currencies. The Yen appreciated 3% against the US dollar to 84.2, the largest gain in 15 years, as investors sought safety against a poor outlook for the US economy. The euro was the worst performer depreciating 3%."
- "Credit markets rallied. The J.P. Morgan’s CEMBI yield was at 5.7% on 20 August, the lowest level since early 2005."

JPMorgan Asia Pacific Equity Research 20100901

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