The technology war between US and China triggered by the telecom equipment giant Huawei has not yet subsided while the US-China trade talk has not yet showing a positive sign. In addition, the increasing US-Iran tension following the shooting down of a US drone led to worries about the escalating geopolitical condition, causing investors’ more risk averse. In fact, demand for safe-haven assets grew significantly on risk aversion over the past week; Japanese Yen grew beyond JPY108/US and climbed to the peak at JPY106.78/US since year-to-date. On the other hand, gold climbed to the six-year high at USD1,439.21 in a week and remained at above USD1,400 after the retreat following a six-day climb. Demand for US Treasury up, the yield of 10-year US Treasury once dropped to 1.97% and stays at around 2% now. The two leaders between US and China are going to meet but have no intention to make concessions on major principles. The most likely outcome would be maintaining the current tariff rate for a period of time and therefore the trade war uncertainty is still facing the market. We recommend to overweight defensive stocks, for example, utilities, telecom and education, in respect of the current market uncertainties.


General Disclosure and Disclaimer
Frontier Capital Management Limited (“FCM”) is a subsidiary of Frontier Financial Group (“the Group”). It is regulated and licensed by Hong Kong Securities and Futures Commission, also is an Exchange Participant of The Stock Exchange of Hong Kong Limited, and a Direct Clearing Participant of Hong Kong Securities Clearing Company Limited.
The information contained in this website is for informational purposes, and does not intend to recommend, invite, offer, or confirm of any terms. Based on the sources that are believed to be reliable, FCM attempts to provide accurate, complete, and up-to-date information and analysis. However, FCM cannot represent or guarantee its accuracy, completeness, or timeliness of such source and information. Before making any decision on your investment, you should weigh the provided information carefully and bear any responsibility and risk incurred. And you should seek for advice of a professional financial advisor.
The Group, its subsidiaries and connected persons may have held some of the equity securities mentioned in this article, but the Group and FCM will place your financial interests ahead of their own.