蜜豆视频

Video: CIO's David Lefkowitz on why he sees US stocks rallying higher (6:38)

Video:蜜豆视频 Explains: What investors need to know about US tariff policy (9:45)

Video:CIO Head of China Equities Eva Lee discusses the recent rally in China tech (4:13)

Global stock markets advanced at the start of the week despite macro uncertainty. The Euro STOXX 600 rose 0.5% to an all-time high on Monday amid a defense-driven rally after European leaders proposed ramping up the continent鈥檚 defense capabilities in an emergency meeting in Paris. Asian shares extended their gains on Tuesday as optimism over Chinese tech continues to build. The US market was closed on Monday due to Presidents鈥� Day, but the S&P 500 is a whisker away from its record high.

The gains come even as the backdrop appears far from conducive to risk sentiment. European officials remain divided on potential peacekeeping plans in Ukraine, while the region鈥檚 growth looks uneven amid political uncertainty. US President Donald Trump鈥檚 proposed tariffs would have a significant impact across the globe, while government funding negotiations in Congress have stalled ahead of a key 14 March deadline to prevent a shutdown.

But we continue to favor global equities in our portfolios, and view the US and Asia ex-Japan markets as Attractive. We also see opportunities in the Eurozone.

Robust earnings growth should underpin further gains in US stocks. We continue to believe that eventual US tariffs are likely to be targeted measures rather than blanket levies given the White House鈥檚 focus on growth and lower inflation. We therefore see room for the US equity rally to continue, supported by a resilient economy, healthy earnings, AI tailwinds, and monetary policy easing. Fourth-quarter results so far suggest corporate profits are on track to grow by around 10% for the three-month period, and we expect another 9% growth in earnings for 2025. Investors have also moved past the initial DeepSeek scare in January, with big tech鈥檚 commitment to AI investments and improving monetization trends reinforcing our confidence in the broader AI story.

Asia offers diverse growth opportunities, while China tech鈥檚 outperformance should continue. Chinese tech shares have rallied over 25% since mid-January amid a positive rerating as the emergence of DeepSeek rekindled investor optimism over AI innovation in China. President Xi Jinping鈥檚 participation in a rare symposium on private enterprises on Monday also signaled Beijing鈥檚 clear endorsement of the role that the tech and private sectors will play in driving the country鈥檚 economic growth. We hold a Neutral stance on China equities, but believe internet names will outperform the MSCI China index amid improving fundamentals, encouraging shareholder returns, and ongoing macro policy support. More broadly across Asia ex-Japan, we forecast earnings growth of 13% this year on strong AI spending, high GDP growth, and lower US and regional interest rates.

Focus on Eurozone small- and mid-caps and Swiss high-quality dividend stocks. The potential for fresh tariffs is likely to weigh on European companies, particularly cyclicals like consumer discretionary and industrials. However, a recovery in the region鈥檚 economy backed by lower rates and reasonable valuations should offer some support. We think Eurozone small- and mid-caps will benefit from falling rates, improving lending conditions, and healthier domestic growth more than their larger peers, while also offering exposure to structural trends including power generation, decarbonization, and automation. We also believe the current dividend distributions from quality Swiss names are sustainable due to robust balance sheets and profitability.

So, while we expect volatility to pick up in the near term amid a range of macro uncertainties, favorable fundamentals should continue to support global equities鈥� next leg up. Investors can consider capital preservation strategies to manage downside risks.