United States 

China and the United States signed the first stage trade deal this week, driving the equity market up, 3 major US stock indexes rose 1.18-1.67% over the past 5 days ending Thursday. The other market focus is the commencement of the 2019 Q4 earnings season, the financials led the charge with a majority having satisfactory report cards. In particular. JP Morgan Chase and Citibank's fixed income businesses have rebounded significantly in Q4. At the time of writing, about 64% of the 38 companies reporting in recorded better-than-expected net profit, indicating that corporate profits remains relatively healthy. Although the non-farm payroll figures in December missed market expectations, and wage growth was at the lowest point since 2018, with the satisfactory corporate earnings and the easing tensions between China and the United States, US equity indexes continued to set new record highs. The US Senate will kick off the President Impeachment process next Tuesday. In addition, the United States will also announce the manufacturing PMI for January 2020.

Europe 

European stock markets underperformed global markets over the past 5 days ending Thursday. Apart from the UK FTSE, both the French CAC and German DAX recorded declines. On Thursday, the European Central Bank (ECB) released the minutes of the first Interest Rate Decision after Lagarde became the president of the ECB. Members emphasized paying attention to the possible side effects of the current monetary policy, indicating some members have reservations about the current loose monetary policy. This cooled down the market sentiment in the Eurozone equities, limiting the performance over the week. As for economic data, the December UK consumer price index released this week in rose 1.3% YoY, which is lower than both the market expectation and previous value. The ECB will hold an interest rate meeting next week, and Germany will announce the January ZEW economic sentiment figures.

China

As for the Chinese and Hong Kong stock markets, the mainland stock market fell slightly over the week, while the Hong Kong stock market slightly rose. In light of easing tensions in the Middle East and the US's reversing China’s currency manipulator status, the Hang Seng Index continued its upward trend over the week. However, the first-phase Sino-US trade agreement was signed in Washington on Wednesday, and China promised to increase purchases of at least US$ 200 billion in US goods and services over the next two years. The general market is worried about China's ability to fulfill its commitments, the ambiguousness of the second-phase trade deal, coupled with profit taking in the market, the Chinese and Hong Kong stock markets narrowly edged up. In addition, the PBOC stated that it will continue to adopt a prudent monetary policy in 2020 to maintain the growth of money supply (M2) and financing scale. M2 in China increased by 8.7% YoY, exceeding market expectations. China also released December import and export data this week, exports grew by 9% YoY while imports grew by 17.7% YoY, both beating market expectations, the 2019 figure also set new record highs for the annual import and export figures. 2019 China GDP data was released this week, a YoY increase of 6.1% is in line with market growth expectations.

• Recent activities include : Harris Fraser held a Press Conference on “2020 Global Investment Market Outlook”, Attended Bloomberg Businessweek/Chinese Edition Top Fund Awards 2019
• Columns, media interview and online channels : “TVB News”,“TVB Big Big VIP”, “Now FINTERVIEW”, “iCable Finance”, “iCable News”, “Capital”, “SingTao Newspaper”, “Sing Tao Investment Weekly”, “Headlines News” , “ET Net”, “OrangeNews”, “Quamnet” and online videos produced by Harris Fraser Group. (including but not limited to the above)

The overall economic outlook continued to stabilize, the official December manufacturing PMI came in at 50.3, remaining above the 50 level. Industrial production remained resilient, industrial profits rebounded, but PPI stayed negative for 6 consecutive months, casting a shadow over the outlook of exporting sectors. Although the Politburo has called for an increase in infrastructure spending earlier in December, the economic growth in China should continue to slow down amidst global uncertainty.

On 1^st Jan, the PBoC announced that RRR cuts will be adopted starting from 6^th Jan. The 800 billion RMB released to small and micro corporations should provide support to the private sector. This provides much needed boost to the market sentiment, especially with the current likelihood of signing the 1^st stage trade agreement, market momentum is expected to improve on the short to mid-term, even though the long term outlook remains less certain, as we do not expect the trade conflict to resolve in 2020.

The dispute between Japan and South Korea continued to cast uncertainties on the 2020 outlook. Although the two leaders emphasised preventing the situation from spiraling out of control during the Christmas meeting, the Korean court ruling afterwards called the 2015 deal unofficial and non-binding, driving tensions higher. Those who wanted to avoid such political uncertainties should consider limiting their exposure to the concerned regions.

Disregarding the continued political uncertainty, we are positive over the economic outlook of Japan in 2020. Although weakness remains present in the December economic figures, the Olympic Games to come, and the huge fiscal stimulation plan of PM Shinzo Abe should provide much needed driving force for the Japanese markets.

More importantly, the ongoing quantitative easing policy of the Bank of Japan in purchasing ETFs provides downside protection. As Olympic Game Hosts’ stock markets tend to outperform global equities during the Olympic year, investors could consider holding a tactical allocation in the market, as the outlook is positive.

As expected the Conservatives has regained control of the parliament, which reduced the level of uncertainty in UK. The Brexit Bill has passed the Second Reading at the Commons, but it remains to be seen whether the amended bill will be passed with Boris Johnson’s latest addition of ‘no further transition period extension’. Trade commissioner Phil Hogan dismissed Johnson’s idea of no extension claiming that the UK-EU trade deal negotiation will be impossible within 11 months.

Fundamentals remained weak. Eurozone manufacturing PMI improved yet stayed in the contraction zone for eleven consecutive months, the Euro Area Economic Sentiment Indicator, further recovered to 101.5 in December, showing the slightest signs of revitalization. Even though Brexit matters seemed to straighten out, the more complicated problem of negotiating a post-transition trade deal would follow the official Brexit, bringing more uncertainty to the region. Thus, with weaker fundamentals and more volatility, we see limited upside for the European markets in the short term.

At the moment, it is widely anticipated that the 1^st stage trade deal will be signed within January, even though the details are yet to be confirmed as of now. Both sides might seek temporary truce until the November elections.

The Presidential impeachment process continued, the Congress has passed articles of impeachment against Trump and officially impeached him. Nevertheless, with a Republican majority, the Senate is unlikely to remove Trump from office. Gallup found that the impeachment process likely fueled better support for Trump, possibly playing into Trump’s hands in the key swing states in the November election.

The fundamentals remain moderately stable. Although December consumer confidence missed market expectations, the record sales figures for Christmas shopping provided much needed market confidence, PMI figures also came in mostly exceeding expectations and staying well into the expansionary zone. Given the apparent relative stability in the US political landscape before the November elections, with the support from the dovish policies of the Fed lasting until 2020 Q2, we still see the US market as a relatively attractive investment option in 2020.

United States 

Recently, the situation in the US and Iran came under spotlight, yet US stayed relatively unaffected. Over the past 5 days ending Thursday, the three major US stock indexes rose 0.3% to 1.2%. Although Iran launched rockets and missiles at US bases in Iraq early in the week, in retaliation for the death of the Quds Force commander, the situation in the Middle East showed early signs of de-escalation. The subsequent speech by US President Trump hinted that economic sanctions would be imposed on Iran, but no further military action would be taken. The increased geopolitical risks early in the week triggered capital inflows into safe-haven assets, such as the Japanese yen, gold, and US Treasury bonds.
Gold prices also rose to a six-year high. In addition, crude oil prices also benefited from the increase geopolitical risk, with the WTI crude oil breaking through the US$ 65 level. However, as the anxiety ebbed out, the prices of safe-haven assets retreated. At the time of writing, US equities are still hitting new record highs. Next week the US will release December inflation and retail sales data, the US economic outlook and corporate earnings in 2020 will be in focus.

Europe 

In Europe, the three major indexes had varied performance over the past 5 days ending Thursday. The British FTSE 100 fell 0.08%, the French CAC slightly increased by 0.02%, while the German DAX was further up at 0.82%. In the UK, Prime Minister Boris Johnson’s Brexit agreement was endorsed by the British House of Commons, the Bill has now been submitted to the House of Lords for the final vote, and the market atmosphere has improved. EU officials remained less optimistic over the whole Brexit matter, the EU representative stated that it is unlikely that post-Brexit negotiations on the trade deal could be completed within the 11 months of transition. Regarding the Bank of England’s monetary policy, Governor Carney pointed out that there is still plenty of room for adjustment, this includes “at least doubling” the central bank’s 60 billion pound asset purchase plan in August 2016. Next week, the UK and the Eurozone will release December inflation data.

China

As for the Chinese and Hong Kong stock markets, the mainland stock market steadily rose, while Hong Kong stocks have experienced large fluctuations. Due to the turn of events in the Middle East since last Friday, the HSI fell by more than 200 points on Monday. Subsequently, as geopolitical tensions eased, the Index rebounded over the week. Overall, both China and Hong Kong stock markets recorded gains this week. Regarding Sino-US trade relations, Chinese Deputy Prime Minister Liu He will lead a delegation to Washington D.C. to sign the first phase of the trade agreement on the 13th to 15th. Trump said that he would start the second phase of negotiations with China immediately. However, he added that relevant negotiations might drag on well until the US elections are over. China’s December CPI rose 4.5% YoY, which was lower than the original expectation of 4.7%. China will release Q4 GDP, December exports and fixed asset investment data next week.

• Recent activities include : Harris Fraser held a Press Conference on “2020 Global Investment Market Outlook”, Attended Bloomberg Businessweek/Chinese Edition Top Fund Awards 2019
• Columns, media interview and online channels : “TVB News”,“TVB Big Big VIP”, “Now  FINTERVIEW”, “iCable Finance”, “iCable News”, “Capital”, “SingTao Newspaper”, “Sing Tao Investment Weekly”, “Headlines News”  , “ET Net”, “OrangeNews”, “Quamnet” and online videos produced by Harris Fraser Group. (including but not limited to the above)

United States

Looking back on 2019, almost all global stock market indexes have recorded gains. Among them, the U.S. equity market ranked nearly at the forefront, with the Dow Jones, S&P500 and the Nasdaq indices rising 22.34%, 28.88% and 35.23% respectively. Sino-US trade dispute is one of the important events of 2019. Entering 2020, trade issues are still expected to dominate the market performance. According to the latest news, the White House's trade adviser says the US-China Phase 1 trade deal would likely be signed in the next week. In terms of recent economic data, the Conference Board Consumer Confidence Index was 126.5, which was lower than the previous data and also the market's survey of 128.5. The Fed will announce the minutes of the December meeting this Friday night, and the market is concerned about the repurchase plan and its interest rate policy outlook. Next week, the United States will announce the December ISM non-manufacturing index and the employment data.

Europe

The performance of European stock markets was mid-range among the peers in 2019. The European STOXX600 index rose by 23.16%, and the UK, French and German stock markets rose by 16.65%, 26.37%, and 25.48%, respectively. In terms of recent economic data, the Eurozone Markit Manufacturing Index fell slightly from 45.9 to 46.3 in December, which is also the 11th consecutive month below the 50 level, with output and orders falling. As for the exchange rate of the British pound, it recorded the best performance in the past 10 years in the fourth quarter of last year, rising about 8%, the largest increase since 2009. The main reason is that after the latest election in Britain, the risk of a no-deal Brexit has dropped significantly. However, the market is still concerned about the transition period at the end of 2020. The Eurozone will release data on consumer prices and unemployment rate next week.

China

2019 is a year when the performance of China and Hong Kong stock markets is quite different. The Shanghai and Shenzhen 300 Index rose by 36.07%, while the Hang Seng Index rose by only 9.07%. The market generally interprets the Hong Kong stock market as having a large ratio of overseas allocations, so it is more vulnerable to the impact of Sino-US trade frictions. However, the latest news indicates that the Chinese Deputy Prime Minister will lead a delegation to visit the United States this Saturday, and the market is expected to sign a trade agreement. In addition, supported by news that the People's Bank of China has cut interest rates, China and Hong Kong stock markets rose sharply on the first trading day of 2020. Earlier, the People's Bank of China (PBOC) announced it will cut banks' reserve requirement ratio (RRR) by 50 basis points, effective Jan. 6, releasing about 800 billion yuan of liquidity into the financial system. The Mainland will release data such as the consumer price index and the service PMI next week.

• Recent activities include : Harris Fraser held a Press Conference on “2020 Global Investment Market Outlook”, Attended Bloomberg Businessweek/Chinese Edition Top Fund Awards 2019
• Columns, media interview and online channels : “TVB News”,“TVB Big Big VIP”, “Now FINTERVIEW”, “iCable Finance”,“iCable News”, “Capital”, “SingTao Newspaper”, “Sing Tao Investment Weekly”, “Headlines News” , “ET Net”, “OrangeNews”, “Quamnet” and online videos produced by Harris Fraser Group. (including but not limited to the above)

United States

The holiday mood set in, stock trading volume was light over the week with market closures on Christmas, yet major US indexes continued to break new highs. Over the past 5 days ending Thursday, the Dow and the S&P 500 rose more than 1%, while the NASDAQ gained more than 2%. Benefiting from the improving Sino-US trade sentiment, the NASDAQ broke the 9,000 level for the first time in history; The PHLX Semiconductor Index, representing the semiconductor sector, has risen more than 20% since the beginning of December. US President Trump has stated that a signing ceremony for the China-US trade agreement will be held. The US economic data released over the week was satisfactory. The University of Michigan market sentiment index further rose to 99.3, and the initial jobless claims figure was 222,000, which was also lower than the revised figure of 235,000 last week. Data to watch next week include the consumer confidence index and ISM manufacturing index.

Europe

European equity markets got mixed performance. Over the past 5 days ending Thursday, the UK FTSE 100 and the French CAC rose 1.4% and 1.0% respectively, but the German DAX fell 0.8%. With regards to Brexit, the House of Commons just passed the Withdrawal Agreement Bill, and we expect getting Brexit done at the end of January as scheduled. In addition, there are reports that EU negotiators will use "restricted access to the EU market" as the bargaining chip for next year's Brexit negotiations, so as to ensure UK compliance with the EU legal framework. The market expects that there will be a larger tug of war between both sides after the official Brexit date. On the economic data side, the consumer confidence index released this week fell to the negative 8.1 level. Next week, investors may pay attention to data like the German CPI and the finalized Eurozone manufacturing index figure.

China

Over the past 5 days ending Thursday, the Chinese and Hong Kong stock markets have shown limited movement, the CSI 300 Index rose 0.22%, while the HSI fell slightly by 0.07%. Earlier, Trump said that he would arrange both parties to sign the trade agreement, but the market sentiment in China and Hong Kong remained cautious. On the other hand, Chinese Premier Li Keqiang mentioned at the beginning of the week that the government will further utilize various measures such as RRR cuts, targeted RRR cuts, refinancing, and rediscounts to reduce actual interest rates and financing costs, so as to ease the financing difficulties of small and micro enterprises. Markets expect these liquidity adjustment measures to be adopted in the near future. As for economic data, the YoY change in Chinese industrial profits in November rose 5.4%, the largest increase in eight months, indicating a rebound in profit growth. The official manufacturing, non-manufacturing indexes, and Caixin manufacturing index will be released next week.

• Recent activities include : Harris Fraser held a Press Conference on “2020 Global Investment Market Outlook”, Attended Bloomberg Businessweek/Chinese Edition Top Fund Awards 2019
• Columns, media interview and online channels : “TVB News”,“TVB Big Big VIP”, “Now FINTERVIEW”, “iCable Finance”, “iCable News”, “Capital”, “SingTao Newspaper”, “Sing Tao Investment Weekly”, “Headlines News” , “ET Net”, “OrangeNews”, “Quamnet” and online videos produced by Harris Fraser Group. (including but not limited to the above)

United States 

China and the United States earlier reached the first phase of a trade agreement, avoiding a new round of tariffs on China and Canada on December 15. The news is positive for market sentiment. The three major US stock indexes rose about 1% to 2% in the past 5 days as of this Thursday. In addition to the good news from China-US trade relations, the economic data released by the United States this week is generally satisfactory, including the numbers of industrial production and manufacturing production in November changed from negative to positive. On the other hand, U.S. President Trump's impeachment charge was approved by the House of Representatives. Trump became the third president to be impeached in history. The impeachment case will be heard in the Senate early next year. The US-Mexico-Canada agreement (USMCA) was implemented. The US Senate passed the Domestic Expenditure Act, which supports the government's funding needs throughout the fiscal year. Important data which will announce next week such as the core PCE and the University of Michigan market sentiment index.

Europe

In Europe, the UK Market rise the most. In the past 5 days as of this Thursday, the FTSE 100 index has risen more than 4%, the French CAC index has only increased by 1.5%, and the German DAX index has fallen slightly by 0.07%. After the British Conservative Party won a major victory in the general election, British Prime Minister Johnson also announced the government agenda, saying that legislation would allow Britain to leave the European Union on January 31, and set the implementation period until the end of 2020. The news supported the UK stock market. On the other hand, for the UK's unexpected extension of the Brexit transition period, the EU warned of risks, and the news affected the GBP to soften to about 1.30. In addition, the Bank of England kept the benchmark interest rate unchanged at 0.75%. Next week, the market may focus on the EU consumer confidence index.

China 

China and Hong Kong stock markets generally performed well this week, with indexes such as the HSI and the CSI 300 recorded rise. As for the China-US trade agreement, the US Treasury Secretary stated that the two sides will announce and sign it in early January next year. It is reported that China has re-purchased US soybeans this week, and plans to waive tariffs on agricultural products from the United States in the future. Mainland China's economic data improved this week, and the year-on-year growth rate of production and retail sales in November accelerated faster than last month. The market is concerned about whether the mainland will relax monetary policy before the Lunar New Year, such as lowering RRR or MLF rates.

• Recent activities include : Harris Fraser held a Press Conference on “2020 Global Investment Market Outlook”, Attended Bloomberg Businessweek/Chinese Edition Top Fund Awards 2019
• Columns, media interview and online channels : “TVB News”,“TVB Big Big VIP”, “Now  FINTERVIEW”, “iCable Finance”, “iCable News”, “Capital”, “SingTao Newspaper”, “Sing Tao Investment Weekly”, “Headlines News”  , “ET Net”, “OrangeNews”, “Quamnet” and online videos produced by Harris Fraser Group. (including but not limited to the above)