Alpha Ba, portfolio manager specializing in global and emerging markets equities with Pillow Investments, gives us a global update of trending news affecting the global markets.
With the ongoing trade war with the US and China, Ba touches on geopolitical issues, Trump, options for investors and how Canada looks globally.
Watch the above video for a closer look at trending topic in the global market
Alpha Ba points out a macro look at the global effects of the trade war and the ensuing global uncertainty. He notes that, “Right now investors are positioning away from the US away from the uncertainty because the US has gone from being the anchor of the global financial system to being now a disruptor of the global financial system.”
Ba states that the question now lies in if the current situation imposed by US President Donald Trump’s tariffs are temporary or more permanent.
Tariffs: Germany’s economy
Ba discusses Europe’s play and how Germany is reacting. Germany is spending about a Trillion Euros in infrastructure and defence. He also adds that he feels these elements will create a positive productivity impact for the German economy as well as an acceleration of German GDP growth from last year.
“I think that the German economy is on a path of faster growth, (more) than they have experienced in, in the past 10 years. Still lower than the US but at least faster from their own historical perspective.”
Alpha Ba, Global Portfolio Manager, Pillow Investments
Ba points out that China continues to grow strongly with the government implementing several, fiscal stimulus measures to support that consumption growth in China.
Geopolitical Risk
On the geopolitical risk management perspective, Ba likes gold. “Gold has been the best asset class this century. It’s far, far higher than the, stock markets. It’s actually gone up 10 times since 2000.
Tariffs: Canadian Impact
On the Canadian side of Trump’s tariff call, Ba adds that 75 percent of Canadian exports go into the US, which could trigger a potential recession. On a positive note Ba feels that Canada may be able to weather the storm. This is due to Canada’s fiscal order which is in decent shape with a 2 percent fiscal deficit. “So there is ample fiscal room to absorb the shock and address these issues.”
Ba addresses that there are some self-help policies that can, Canada can enact.
‘If we were to free up interprovincial, trade by lowering regulation, lowering licensing, lowering transportation, (and) impediments, that could act like a 7 percent stimulus to GDP. So that would be C$160B fill in to the Canadian economy.
He adds that, Canada has to look into diversifying trade relationships and finding more reliable partners and suggests Europe and Asia.
Ba also touched on AI infrastructure in Canada and the opportunity for the country to attract top talent to get a jump start on AI technology.
“I think it’s really important because I think AI generates productivity and eventually it will generate a productivity boom.”
Alpha Ba, Global Portfolio Manager, Pillow Investments
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