How should investors deal with the unresolved Sino-US trade war?

        On August 23, before the US stock market opened, China announced that it would impose retaliatory tariffs on US $75 billion in goods, while also resuming tariffs on us cars and components. In his speech at the annual meeting of the global central bank, Powell, chairman of the Federal Reserve System of the United States, stressed once again that the federal reserve system would pay attention to the economic development of the United States and make appropriate actions to maintain economic expansion, but did not make further interest rate reduction commitments as expected. Then, US President trump responded to China and announced that he would raise tariffs again for us $550 billion of China's imports. The Sino US trade war was rapidly warming, bringing a conservative atmosphere to the financial market.

        In the Sino-U.S. trade battle on August 23, Europe and Japan were not immediately affected by the early closing, but the following week saw mixed gains and losses. The SP 500 index fell 1.44%, the Dow Jones Europe 600 index rose 0.47%, and the Nikkei 225 index rose 1.43%.
        
         In terms of U.S. economic data, the U.S. Department of Commerce announced that the annual rate of new housing starts in July was 4% lower than that of the previous month, but the construction permit was 8.4% higher than that of the previous month, with an annual rate of 1.336 million households, the largest increase in more than two years. Retail sales also surged 0.7%, better than economists expected by 0.3%. On the whole, domestic consumption in the United States is still stable, and there is little chance for the economy to fall sharply.
        
         In Europe, the German government is preparing a fiscal stimulus package to support the domestic economy and consumer spending, while manufacturing data in the euro zone and Germany in August also slightly recovered. However, the collapse of Italy's populist ruling coalition may lead to the re-election of Parliament ahead of schedule, which leads to the political turmoil of the third largest economy in the euro area. In addition, British Prime Minister Johnson & Johnson's attitude towards hard brexit is quite persistent. These negative factors have brought gloom to the prosperity of the euro area, and almost establish the determination of the European Central Bank to implement the next round of easing policy in September.
        
         On the Japanese side, exports picked up slightly in July, and exports to the United States rose for a decade in a row. In terms of industry, the initial value of manufacturing PMI rebounded for two consecutive months due to the increase of exports in August, and manufacturing orders and production improved. In addition, with the deterioration of Sino US trade issues, the US Japan trade agreement has made rapid progress; the leaders of the US and China have roughly reached consensus at the G7 leaders' summit, and an agreement may be reached at the UN General Assembly in September.
        
         By the end of August, due to the good performance of the stock markets in Greater China, South Korea and Russia, the rebound of emerging markets was driven; while Latin American stock market became the worst performing region in emerging markets due to the possible default of Argentina; MSCI Emerging Market Index rose 0.35%, MSCI Emerging Asia index rose 0.70%, MSCI Emerging Europe index also rose 2.24%; MSCI Emerging pull The US index fell 2.97%.
        
         In China, the recent economic data and financial data have declined in an all-round way, and the prosperity has obviously declined. Therefore, the people's Bank of China has for the first time used the new loan market quotation rate (LPR) to improve the efficiency of interest rate transmission and reduce the financing cost of the real economy, so as to support the private SMEs trapped by the downturn.
        
         In terms of bond market, in terms of mature bond market, due to the continuous slowdown of global economic growth, the expectation of the Central Bank of the United States and the European Union plus monetary easing policy continues to increase, and the Federal Reserve System of the United States has implemented the first interest rate cut in 10 years, and continues to increase the holding of bond market bulls. Therefore, the bond yield of major countries in Europe and the United States continues to bottom out, and the global negative interest rate bond has reached as much as 16 trillion US dollars; in Europe and the United States Under the central bank's restart of monetary easing policy, high-grade investment grade bonds benefit from the continuous inflow of funds, with a relatively stable price trend. Although the future growth space is limited, they are still the primary choice for the layout of core assets.
        
         On the other hand, in the case of low yield of mature countries' bonds, emerging market US dollar bonds obviously attract capital inflow and push up bond price trend due to their high interest distribution and yield; however, due to the relatively large fluctuation, it is suggested to choose the composite bond fund combining investment bonds, emerging bonds and high-yield bonds, which can not only reduce the volatility of investment portfolio, but also reduce the volatility of investment portfolio. It has a better interest distribution rate. In addition, the trend of emerging market local currency bonds continues to be weak under the influence of the continued strong US dollar and Argentina events, so it is necessary to be conservative. It is suggested to appropriately reduce the relevant investment positions.

        conclusion
         At the end of August, the United States and China continued to increase their efforts to impose tariffs, suggesting that in the short term, it is almost impossible for the two countries to reach any effective trade agreement; the market understands that the trade war between the United States and China is becoming more and more fierce. Under the condition that global trade and economic growth continue to decline, the central banks of various countries have launched monetary easing policies respectively, so that the trend of economic downturn can soft land.
        
         According to the Investment Consultant Department of Far Eastern International Bank, under the condition that market information and economic substance information are mostly negative, it is difficult for global stock market to have a better performance in the short term; in the current conservative atmosphere of the market, it is necessary to continue to reduce the more active investment positions of technology stocks and emerging market stocks, and increase the defensive public utility stocks and REITs. Investment positions of related stocks can reduce the risk and impact of market fluctuation on the investment portfolio. Although the future exploration space of bond yields of major European and American countries is relatively limited, high-grade investment grade bonds have two advantages of safety and stability, and can still be included in the core investment allocation; if considering the higher interest distribution rate and more reasonable volatility, it is suggested to choose a composite bond fund combining different types of bonds, which can not only have good allocation. Interest rate can also reduce the overall portfolio volatility.