Hui Li Fund Chief Investment Officer - Multi-Asset Investment Chong Huixin shared her latest views on multi-asset investments. She pointed out that the weak performance of the US employment report in July has raised concerns in the market that the US economy may be heading towards a recession. In addition, the Bank of Japan may continue to raise interest rates within the year, triggering a wave of unwinding of yen carry trades, causing turmoil in the global market, especially in the technology sector. After a round of selling, the market has stabilized and valuations appear relatively reasonable. However, considering the ongoing uncertainties in the market, market conditions may continue to be volatile. The Chinese stock market (especially A-shares) is most likely to be insulated from the turmoil in the global market and has become a market with strong resistance to declines. In addition, the Hong Kong market is expected to benefit from a more aggressive rate cut path in the US. Meanwhile, since the proportion of technology stocks in the Southeast Asian market is relatively low, the impact of widespread selling of technology stocks in the region is lower. Expectations of a rate cut by the Federal Reserve are also expected to benefit this region. Hong Kong stocks are expected to benefit from a more aggressive rate cut path in the US, A-shares have resistance to declines US manufacturing data from the Institute for Supply Management and July non-farm payroll data were both lower than expected, triggering concerns in the market that the economy may be heading towards a recession. As investors become increasingly worried that the Fed's rate cuts may be too late, market pricing reflects more than 100 basis points of rate cuts within the year, with a 50 basis point cut expected in September. The above concerns about economic recession, along with the actions and strong language of the Bank of Japan, have triggered a wave of unwinding of yen carry trades, causing volatility in the market. While it is believed that the US will not fall into an economic recession in the short term, with uncertainties surrounding the US elections and geopolitical risks intensifying, market volatility may continue to increase. Hui Li believes that Chinese Hong Kong stocks are less directly affected by the turmoil in the global market. Given the more aggressive rate cut path in the US, the Hong Kong market will benefit, as there are many industries sensitive to interest rates. This will also help reduce cost pressures for consumers and businesses. Furthermore, the Chinese economy remains weak, showing increasing signs of bottoming out. The gradual appreciation of the renminbi also helps stabilize market sentiment. The composition of A-shares is mainly made up of local companies, making them most immune to the turmoil in the global market and becoming a market with strong resistance to declines in the weak global investment atmosphere. However, long-term bond yields have fallen, reflecting weak economic prospects. Benefit from a more favorable base, there are signs of improvement in economic data. However, due to the lack of more specific policy details, the market is struggling to regain momentum. Technology stocks have a significantly lower proportion, so the impact on the Southeast Asian stock market is lower The crowded trading unwinding of technology and artificial intelligence related stocks has dragged down the US stock market. Since the proportion of technology stocks in the Southeast Asian market is significantly lower, the impact of the selling wave is relatively minor. With the Fed expected to start cutting rates soon, as long as the US does not fall into an economic recession in the short term, Southeast Asia will benefit, as inflation is stable and countries in the region are likely to follow suit in cutting rates. A fall in the US dollar will also help the region's markets deal with financing costs. After the market correction, valuations in South Korea and Taiwan have approached their historical average levels. The trend in these markets may fluctuate with the US market becoming more volatile, but their valuations are still lower than in the expensive US market. As investors reduce their risk levels, unwinding of yen carry trades has led to a outflow of funds from emerging markets, causing emerging market (excluding Asia) currencies to be sold. With the approaching US election, there may be significant implications for emerging markets such as Latin America and Eastern Europe. Tensions in the Middle East continue to pose risks to the market. On the other hand, hastening rate cuts in the US will help boost the market. Japanese stock valuations have fallen to attractive levels, potential selling pressure will decrease The unwinding of yen carry trades (partly due to the Bank of Japan's actions and language) has led to significant market fluctuations. However, in terms of currency and stock valuations, after this round of market selling, the Japanese market is now more balanced. The market may continue to fluctuate, and any concerns investors may have about the Bank of Japan further raising interest rates could trigger significant volatility once again. However, with the yen returning to a more reasonable level (but still undervalued based on purchasing power parity) and the decrease in yen short positions, the market will focus more on fundamentals. So far, second-quarter corporate earnings have been better than expected, and companies are increasing stock buybacks, which may ease the input inflationary pressure due to a stronger yen. Therefore, based on current market valuations reaching attractive levels, potential selling pressure will decrease. Inflows into investment-grade bonds, limited upside for Asian high-yield bonds US bond yields have declined, and the market sentiment has turned subdued, which is helping to stimulate inflows into investment-grade bonds. Since market pricing reflects a more aggressive rate cut path for the Fed, investors may switch to longer-term investment-grade bonds. However, the overly bearish market sentiment on the economy has led to overly rapid movements in bond yields, so the market needs to adjust expectations again, depending on future economic data releases. The spreads are at relatively tight levels, and lower than historical averages. The upside for Asian high-yield bonds has narrowed. Although there is no downside potential in the short term, as market sentiment weakens, market conditions may become more volatile. The spreads are at relatively tight levels, and lower than historical averages. With increasing uncertainties in the market, the outlook for emerging market bonds will continue to be unstable. In addition, escalating geopolitical risks will continue to weigh on the market. Gold's outlook is still positive, multi-asset strategies have lower volatility After breaking through historical highs, the price of gold is entering a consolidation phase. Given the decline in bond yields and a weaker dollar, the outlook for gold remains positive. In the medium to long term, gold continues to be an ideal tool for hedging geopolitical risks. In addition to concerns about geopolitical risks, investors are also worried about de-dollarization trends, which may continue to support the price of gold. Compared to traditional single-asset or balanced investment portfolios, multi-asset strategies have lower volatility. However, the correlation between risk assets such as stocks, credit, and commodities has increased significantly recently. In an environment of uncertainty with low yields, returns are becoming an essential source of return for investors.