What are the implications if trading hostilities escalate further?

'Perfect storm of threats'

After a solid outperformance in 2017 and Q1 2018, emerging markets equities have entered risk-off territory.

What has changed? Not much from a fundamental viewpoint: the global growth cycle is still improving, earnings are still growing nicely, and even trade numbers remain robust. Yet, while most of the cards dealt are the same, fear has joined the players' table.  Markets have good reasons to be fearful. A perfect storm of potential threats has appeared on the horizon: a more hawkish Fed, protracted trade hostilities and geopolitical concerns. None of these per se could halt the global growth cycle but, put together and pushed to their limits, they could be powerful gamechangers. M&G's ...