There Is More Upside Ahead for Markets: Bank of Singapore’s Lee

The transcript discusses the potential impact of the December 15 tariffs on the economy, highlighting the low likelihood of their implementation due to the risk of recession. It analyzes market reactions, noting sharp corrections in equities and bonds, and suggests that President Trump may be bolstering his tariff reputation ahead of a China trade deal. Despite recent news, investor expectations for 2020 remain optimistic, with historical reflation episodes indicating more upside potential. However, starting valuations are higher, suggesting moderated return expectations for 2020 compared to 2019.

What is the main reason the White House might avoid implementing the December 15 tariffs?

• To prevent a recession risk before the 2020 elections

• To support local businesses

• To increase government revenue

• To strengthen ties with the EU

How are the recent tariffs on Brazil, Argentina, and France perceived in relation to Trump's trade strategy?

• As a measure to reduce the trade deficit

• As a response to currency manipulation

• As a strategy to bolster Trump's reputation before a China trade deal

• As a move to increase domestic production

What has been the market reaction to the recent tariff announcements?

• A stable movement in all markets

• An increase in the dollar index

• A sharp correction in equities markets

• A significant rise in bond markets

What historical periods are compared to the current market conditions in terms of reflation episodes?

• 1992, 1997, 2003, 2011

• 2001, 2008, 2010, 2015

• 1995, 1998, 2012, 2016

• 1990, 1995, 2000, 2005

What is the advised approach for return expectations in 2020 according to the analysis?

• Moderate return expectations

• Expect no returns

• Expect similar returns to 2019

• Expect higher returns than 2019