Ashton Whiteley: Trump Bump Fades as Reality Sets In

Shanghai, China, June 16, 2017 (Newswire.com) - Ashton Whiteley says Asian stocks represent “huge opportunity” as U.S. equities stagnate on Trump ineptitude. 

Emerging markets-focused investment house, Ashton Whiteley has told institutional clients that Asian equities represent a “huge opportunity” and it has dubbed U.S. stocks as being “unjustifiably expensive.”

"With doubts over the administration's efficacy and signs the economy is losing steam, we expect U.S. stocks to correct by at least 10 percent. We expect Asian stocks to reap some benefit so we're advising clients to consider increasing exposure to Chinese and other emerging market assets."

Ashton Whiteley Strategist

In a research note sent to clients, the firm cited Asian stocks as being particularly attractively priced after many foreign investors liquidated holdings in order to take advantage of an expected increase in US interest rates.

“Though it’s far too early to say for certain that the U.S. interest rate hike cycle is over, there is plenty of reason to believe that the Federal Reserve will find its hands tied going forward as the U.S. economy shows some weakness. If they stop raising rates, we anticipate a wall of money flowing back into Asia looking for returns,” said an Ashton Whiteley strategist.

The research note also cites concerns over the Trump administration’s ability to deliver on promises made during its presidential election campaign. Much of the surge in U.S. equities since November 8, 2016 has been attributed to hopes that Mr. Trump would be able to implement new tax reform legislation that would be highly favorable to businesses but as of yet, the administration has failed to provide details. 

Mr. Trump was seen as somehow being able to cut through the establishment bureaucracy in Washington to get things done but he has suffered several, high-profile setbacks. His travel ban, the much-vaunted border wall with Mexico and the repeal and replacement of the Affordable Care Act (also known as “Obamacare”) have failed to materialize and his administration is continually bogged down in controversy over allegations that some members of the presidential election campaign team colluded with Russia to influence the result.

“With doubts over the administration’s efficacy and signs the economy is losing steam, we expect U.S. stocks to correct by at least 10 percent. We expect Asian stocks to reap some benefit so we’re advising clients to consider increasing exposure to Chinese and other emerging market assets,” concluded the Ashton Whiteley strategist.

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Source: http://ashtonwhiteley.com