Reviewing the performance of global financial markets in 2019, the performance of financial markets fluctuated in the first half of the year due to the sharp rise in U.S.-China trade frictions, the uncertainty of Brexit, and the market's concerns about the economic outlook. However, as major global central banks have regained loosened monetary policies (QE), such as interest rate cuts and resumption of debt purchase programs, etc., to support economic performance.
The United States and China restarted trade negotiations and signed the first phase of the trade agreement; the Conservative Party won the majority of seats in the British election, which is expected to make the Brexit progress more smoothly, boost market investment confidence, and stimulate risky assets. The major stock markets except Malaysia have paid positive returns, including Russia, the United States, China, Taiwan, France, Brazil and other places with more than 20% or even more than 30% gains. In the bond market, emerging bonds and high Debt collection performed best. But 2020 seems unable to continue this wave of gains.
The global growth rate in 2020 will be the slowest or possibly negative growth since the global financial crisis a decade ago, reflecting common factors and country-specific factors affecting countries.
U.S.
In terms of U.S.-China issues, the two sides reached consensus in the first stage of trade, including the United States reducing some tariffs on Chinese goods in exchange for Chinese purchases of U.S. agricultural products and other goods, China's commitment to better protect U.S. intellectual property rights, Tariff collection plans, etc. Progress in the second phase of U.S.-China negotiations, geopolitical events with Iran, US presidential election, Wuhan Coronavirus, U.S. currency and stock markets this year may be affected.
Japan
In 2019, the Japanese government adopted large-scale fiscal expenditure measures to cope with the impact of the increase in consumption tax. In addition to the impact of the U.S.-China Trade war, Wuhan Coronavirus must have affected the production of Japanese automakers in Wuhan. Whether the 2020 Tokyo Olympics will be affected by Wuhan pneumonia must also be closely monitored
Emerging Markets
Large emerging market economies, such as Brazil, India, Mexico, and Russia, have experienced country-specific weak growth, increased macroeconomic pressures related to factors that have made the situation more difficult, including tightening financial conditions in Argentina, geopolitical tensions in Iran, and social unrest in Venezuela, Libya, and Yemen.
Canada
Because of the Wuhan Coronavirus, the Canadian business community has felt pressure, aviation, tourism, and exports have been affected, and even mortgage interest rates have been under downward pressure. Short-term rents in the housing market have been directly affected. The Bank of Canada has maintained a basic interest rate of 1.75% for more than a year. It is believed that the housing market will also be affected by this wave of epidemics.
China
Wuhan Coronavirus, the world ’s most concerned topic in January, is bound to affect the global economy of 2020 worldwide. Wuhan is the core area of the Yangtze River economic belt in China. It is an economic center and transportation hub in southern China. Wuhan has advantages in several industries such as medicine, auto parts, optoelectronics, and electronics. In particular, APIs and electronics, such as the well-known local YOFC fiber manufacturer in mainland China. In addition, Wuhan is also a major global manufacturing town such as Nissan, Honda, and General Motors. The unprecedented closure of Wuhan will definitely leave an irreparable disastrous in the Chinese economy. China have long closely related to global economy; the Coronavirus will definitely hit global GDP.
Investors are advised to spread their risks and avoid investing in industries with high local connections or factories in Wuhan, China. Or, under the premise of understanding and willing to assume a reasonable level of risk, you can use professional investment to screen suitable investment targets and diversified allocations. You can also enter the market in a crisis and wait for the risk to be eliminated.
