Although the reliance on China may have decreased it is, however, reasonable to assume that China will continue to find other markets for its products, US tariff barriers notwithstanding.
As for the reaction of the US market to a second Trump term it appears to be unperturbed at present, with the economy looking in rude good health.
At a recent conference in the US one of my colleagues was struck by the positive outlook of most of the corporates he met there.
Little to no mention was given of the upcoming election, far less any potential negative impact it might have on the way the companies do business.
The Fed’s delay in cutting rates clearly appears to back up the rosy glow of the US economy.
The big conundrum for emerging markets is currently the fact that China is cheap but most investors want to steer clear, whilst India is much loved but investors worry about the valuations.
China is clearly going to face headwinds of another Trump presidency but, irrespective of the US election, we believe that India is still a go-to investment destination, with arguments as to expensive valuations failing to take into account profit potential.
By raising rates earlier in the inflationary cycle Latin American countries are now in a position to ease and some are already doing so.
Consequently, in addition to the positive impulse of near-shoring to several of these economies, monetary easing should be supportive for both companies and consumers.
Mark Martyrossian is director at Aubrey Capital Management
