Capital Markets: Winter 2019

​ Fundamentals

China Is Stimulating

• Chinese growth has been a key driver in volatility of global equities

• A trade deal would go a long way to help the decelerating Chinese economy but monetary policy may pick up some of the burden until then

Will easing work again?

5.5%

30%

Lower rates helped equities bottom

20%

4.5%

S&P 500 YoY

10%

0%

3.5%

China Interest Rate

-10%

2.5%

-20%

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19

Source: FactSet. China interest rate is SHIBOR one year rate.

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