China

China missed the chance to change course on economic policy and now it faces rising social instability and western protectionism. This policy approach implies it is not afraid of escalating strategic conflicts in East Asia. Investors should continue to underweight Greater Chinese assets. Any US-China détente will come later rather than sooner.

China's cyclical and structural headwinds will likely undermine Beijing’s initiative to accelerate urban migration over the next five years.

The prices of multiple financial assets have failed to break above their technical resistances. When this occurs, a breakdown ensues. In brief, global risk assets remain vulnerable. We are upgrading Chinese onshore stocks from neutral to overweight and offshore ones from underweight to neutral within EM and global equity portfolios.

The market is pricing in a soft landing, but we see growing signs that the global economy is faltering. Investors should be defensively positioned.

Republicans are favored but the election is still competitive. Equities, corporate credit, and cyclical sectors will fall until policy uncertainty is reduced.