Global China Summit
全球中国峰会
The 22nd annual Global China Summit, held in Shanghai on May 21–22, 2026, convened more than 2,900 delegates from 1,300 companies across over 35 countries and markets. Designed as an international platform for constructive exchange, the Summit brought together participants to share perspectives and deepen understanding of developments shaping China markets and the broader global landscape.
Key takeaways from the J.P. Morgan Global China Summit 2025
China: Key themes for investors to watch as trade talks continue
Despite the volatile start to the year, investors gathered at the 21st annual Global China Summit in Shanghai were optimistic on the path forward, with China’s economic outlook, trade dynamics, market fluctuations and industry innovation in focus at this year’s event.
After months of tit-for-tat exchanges between the world’s two largest economies, the U.S. and China have temporarily agreed to lower tariffs on each other’s products.
Following constructive talks in Geneva earlier this month, the U.S. and China reduced tariffs by 115% each for the next 90 days, announcing a 10% universal tariff rate.
The timing of a potential deal, China’s export-driven economy and the future of global supply chains were key themes at the two-day event.
“For the moment, we assume the temporary tariff reduction will stay for the rest of 2025. The current agreement presents a temporary pause that allows room for further reduction of tariffs. Equally, the bar for a potential deal between China and the U.S. is high and it could take longer than 90 days, so a possible resurgence in tariffs cannot be ruled out yet,” said Haibin Zhu, chief China economist and head of Greater China Economic Research at J.P. Morgan.
Longer term, panelists agreed that China’s focus on boosting domestic demand and household spending to reduce its dependence on exports will be vital for sustaining future growth.
Transshipment, or the rerouting of goods through a third country, was also a focus, as the U.S.–China trade dispute has led to significant changes in transshipment patterns, particularly involving countries like Vietnam. As trade tensions have escalated, Vietnam’s imports from trading partners around the world and exports to the United States reached record highs.
"The issue of transshipment will become more important as part of this new wave of U.S. trade agreements," said Joyce Chang, chair of Global Research at J.P. Morgan, in a panel discussion.
Onshoring and “friendshoring” — working with other trade partners on strategic issues such as shipbuilding — will also be key for the U.S. administration as it refines trade agreements in the region.
Like the rest of equity markets around the world, Chinese stocks have experienced significant volatility so far this year. However, recent trade developments have provided a more optimistic outlook, with potential for further gains as tariff negotiations progress and domestic policies support economic stability.
As of late May, Chinese equities have shown resilience, with the MSCI China index up over 15% for the year. The onshore CSI 300 Index lagged with a 1.4% return over the same period, marking a recovery from earlier losses.
“China equities had an earnings per share (EPS) down cycle from 2021 to early 2024 — but earnings have come back, particularly in the MSCI China In some of the key sectors we see some really strong growth, which would suggest upside to 2025 consensus estimates,” said Wendy Liu, head of China and Hong Kong Equity Strategy at J.P. Morgan, in a Bloomberg TV interview on the sidelines of the conference.
Liu said sectors to watch included communications (essentially internet platforms in gaming, media and entertainment), discretionary and healthcare. J.P. Morgan Research has a base case and bullish case year-end targets for the MSCI China of 80 and 89 respectively, which would represent double-digit upside from current levels of around 75 — contingent on a positive trade agreement between the U.S. and China after the current negotiation period, during which the index may trade range-bound.
Elsewhere, Amin Nasser, president and CEO of Saudi Aramco, highlighted China’s strategic importance to energy markets and his firm, which has significant investments and projects valued at over 240 billion yuan (around $35 billion).
On the state of the oil market, Nasser said there was growth of 1.7 million barrels [a day] in the first quarter year-on-year. Despite the volatility following tariffs, the market is healthy, particularly in China.
“China is one of the biggest importers of crude oil. As it stands today, [oil demand is] at around 17.4 million barrels [a day]. Considering that China’s indigenous production is around 4 million barrels a day, it imports close to more than 13 million barrels of crude every day. It is the largest in terms of imports globally and it’s an important market for all energy players around the world,” said Nasser in a conversation with Filippo Gori, co-head of Global Banking and CEO of EMEA at J.P. Morgan.
On the global deficit, Jamie Dimon, chairman and CEO of JPMorganChase, warned of the potential impact it could have on interest rates worldwide, urging investors not to become complacent.
“We have gone from a fairly benign inflationary environment of low rates to a slightly higher one. People think higher rates means the 30-year U.S. Treasury bond hits 5% — but why not 6%, what law says it can’t be 7%? I would be cautious of being complacent when it comes to the outlook for stock prices and bond spreads,” Dimon said.
Innovation across some of China’s specialist sectors was another area of interest, with a focus on assisted driving, robotics and biotech.
In assisted or partially automated driving, the proportion of vehicles equipped with assisted driving technologies is set to expand rapidly, according to Dapeng Gao, chairman and president of Desay SV, who discussed the outlook for the market with Nick Lai, head of Asia Autos Research at J.P. Morgan.
Level 2 assisted driving refers to partial automation and these systems typically offer functionalities such as traffic-aware cruise control, in-lane autosteer, automated lane changing and auto parking.
The regulatory environment in China has been tightening around autonomous driving technologies, but the penetration rate of Level 2 is still expected to more than double from 14% currently to around 40% in the next two years, Gao said.
Robotics was in the spotlight, with panelists discussing how innovation in the sector could address labor shortages, high costs and efficiency demands in industries such as logistics and warehousing.
Humanoid robots are also poised to enter consumer markets, driven by advancements in artificial intelligence (AI) and motion control technologies. In a panel on the future of automation, Shitao Gu, co-founder of MagicLab, said the group was focusing on reducing production costs through in-house development of core components, with an aim to provide cost-effective mass production.
In biotech, AI is helping to fuel drug discovery. The first drugs conceived entirely by AI could hit the market in just a few years, said Alex Zhavoronkov, CEO of startup Insilico, in a session on the sector.
The pharmaceutical industry has been harnessing AI to reduce the cost and the amount of time it takes for drugs to make it through the research and development (R&D) phase before going to clinical trials, but no AI-conceived drugs have been approved as yet.
Insilico have over 30 programs out of generative AI and Zhavoronkov hopes to see some approved in the next five years or so.
China’s government has emphasized the importance of boosting consumption to spur economic growth. For panelists in the consumer and retail sectors, changing consumer preferences, the need for constant innovation and the importance of localizing supply chains were top of mind.
In 2024, China’s household services consumption expenditure accounted for around 46% of total household consumption expenditure, official data showed. The significant portion of consumer spending currently directed toward services, rather than goods, provides opportunities for businesses in the region, according to speakers.
Yuanwen Sun, founder and CEO of TOP TOY — known for its focus on collectible and designer toys — said the group has been expanding its presence in the market by opening new stores and collaborating with various brands to offer a wider range of products.
The company aims to cater to both children and adult collectors, tapping into the growing trend of collectible toys and pop culture merchandise, along with demand for immersive retail experiences.
Joost Vlaanderen, president of Mondelez International (the parent company of Oreos) in Greater China, said having a local strategy was critical to success. The group is basing a headquarters and a large R&D center in China, so products can be developed locally.
Vlaanderen also said supply chain diversification is key to remaining competitive, with Mondelez aiming to produce as much locally as possible. The biscuit maker plans to harvest its first wheat grown in China to avoid the direct impact of tariffs.
Key takeaways from the J.P. Morgan Global China Summit 2026
Four themes for investors as geopolitics and AI define the next cycle
Despite a volatile start to the year, investors gathered at the 22nd annual J.P. Morgan Global China Summit in Shanghai were cautiously optimistic about the path forward. Geopolitics and the investment outlook, AI and biopharma breakthroughs were among the key themes at this year’s event.
Investors highlighted two key forces defining the current market outlook: the continued pull of AI-driven trades and a geopolitical backdrop that is reshaping risk appetite in ways that are difficult to forecast and harder to hedge.
One of the striking features of recent months has been how technology momentum has continued to build even as macro headlines and trade tensions have remained fluid, highlighted Kelly Wen, Co-Head of APAC Cash Equities Franchise Sales at J.P. Morgan.
That tension has helped push both U.S. and North Asian equities to record highs, shifting investor focus away from broad “risk-on versus risk-off” calls and towards incremental opportunity. Within the region, North Asia was highlighted as offering the most accessible liquidity and deployable capacity for global investors.
Joyce Chang, Chair of Global Research at J.P. Morgan, pointed out a central question for the next cycle is who captures the gains from rising productivity — and whether those gains flow more to capital than to labor.
“Capital income has outpaced labor income for a while and a key question is whether corporates step up the substitution of capital, especially AI and software, for workers. Are we moving more rapidly into a capital income world that captures the gains with labor income capturing less? That is the race we’re talking about in many ways — not just the tech race,” said Chang.
Chang also cautioned that too much focus on the equity narrative could be causing the market to underappreciate what the bond market is signaling.
“We are seeing a synchronized sell-off across developed bond markets. If fiscal debt keeps rising and inflation proves sticky, there’s a growing risk of a structural repricing of duration risk and the term premium,” Chang warned.
Oil was also in focus as a key macro swing factor, with tightening supply and the potential for further inventory drawdowns in June may raise the risk of a sharper price spike. Even if flows normalize, elevated oil prices are expected to persists through 2026, with some easing possible in 2027.
On policy and liquidity, Jamie Dimon, Chairman and CEO of JPMorganChase, highlighted how unresolved macro issues, such as higher deficit spending, can remain dormant until liquidity abruptly disappears.
"There's plenty of money out there, but that dries up pretty quickly. When investment committees are concerned about credit, they make very simple decisions. More cash, cut your credit exposure. And when they do that, liquidity can drop sharply."
As well as cycle risks, Aristotel Kondili, Director and Portfolio Manager at Lazard Asset Management, pointed to a shift in positioning dynamics worth watching. The top 30 sovereign wealth funds, managing roughly $11 trillion in assets, began the year with their most unhedged dollar exposure on record — a setup that could matter meaningfully for future flows if hedging behaviour shifts.
Kondili argued this backdrop has made the emerging markets (EM) story more compelling, with returns increasingly driven by individual country narratives — domestic demand, reform momentum and supply-chain diversification — rather than broad EM exposure.
Across discussions, the common message was opportunity in Asia Pacific increasingly rewards selective positioning and a disciplined approach to liquidity and duration risk.
The AI investment cycle dominated discussion at this year's Summit, with the debate moving beyond whether the build-out is real. For investors, the focus has shifted to where value will accrue, what will be commoditized and what constraints will shape the next phase.
"There are various parts of the AI ecosystem that people are looking at — including infrastructure, semiconductors, models and eventually AI applications, which is where I think eventually all of this investment is going to lead towards," said Gokul Hariharan, Co-Head of Asia Pacific Technology Research at J.P. Morgan.
The investment numbers are striking. The top 30 AI-linked companies are driving roughly $775 billion of capital expenditure and $450 billion of R&D, with the rest of the S&P 500 adding a further $630 billion of combined capex, according to J.P. Morgan Research estimates.
"We're probably getting to $1 trillion of capex from the hyperscalers by next year, maybe even higher than $1 trillion," added Hariharan.
Few questioned the strategic logic of the investment. The concern is one of timing — competitive advantage in AI can shift quickly, while interest rates, government spending and central bank policy adjust more slowly. If the cycle peaks or disappoints before the macro environment has caught up, there may be little cushion to absorb the impact, potentially making any downturn more volatile than usual.
Consolidation among the cloud and data center platforms that underpin AI emerged as another clear near-term theme. Keeping pace with rapidly evolving hardware, rising power demands and continuous software development is becoming increasingly difficult for all but the largest and best-capitalized platforms. Panelists noted the number of providers competing today is unlikely to reflect the number that will be standing in five years.
Competitive advantage will increasingly reside in the platforms and ecosystems built around AI models rather than in the models themselves, said Andrew Dai, founder and CEO of Palo Alto based AI startup, Elorian. Dai also flagged a significant gap in current capabilities — today's models perform strongly on text but remain limited on images and visual data. Closing that gap, he suggested, represents one of the more significant opportunities still ahead.
The automation and robotics conversation was equally forward-looking. AI is not simply being layered onto existing industrial systems — it has the potential to restructure them from the ground up, said founder and General Manager of Market Intelligence Resource, Edwin Feng.
Generative AI is beginning to break down the fragmented systems that have long defined industrial control, opening the door to approaches that could meaningfully expand the market. Humanoid robots were seen as complementary to existing infrastructure rather than a replacement, addressing tasks where traditional automation has not been cost effective or practical. Market consolidation is also expected to continue, with leading platforms better positioned to capture share than smaller players.
Cross-border collaboration in biopharma has moved from strategic preference to structural necessity — and AI is accelerating the pace at which that collaboration is generating results.
"Cancer does not see borders. Alzheimer's does not see borders. Our hope is that innovation doesn't see borders," said Jerry Lee, Global Chair of Investment Banking and Global Co-Head of Healthcare Investment Banking at J.P. Morgan.
The deal activity reflects that shift. In 2025, the sector saw 150 cross-border biopharma deals totaling $135 billion in deal value, with $7 billion paid upfront — already exceeding total primary market financing for biotech companies over the same period, noted Jane Wu, Head of China Healthcare Investment Banking at J.P. Morgan.
Activity in the first four months of 2026 already surpassed first half of 2025 levels, suggesting that licensing and partnerships have become an important source of the sector's capital formation channel.
AI is also beginning to deliver real results in drug discovery. Alex Zhavoronkov, founder and CEO of Insilico Medicine, pointed to a step change in development timelines — the journey from zero to developmental candidate has fallen from roughly 4.5 years using traditional approaches to between 9 and 18 months, at a fraction of the historical cost.
The panelist view was clear: modern drug discovery requires global data, global talent and multi-jurisdictional execution — making cross-border partnerships a structural feature of the industry rather than a tactical choice.
Consumer discussions pointed to a consistent global pattern — a more uneven landscape and while premium segments are showing resilience across regions, value sensitivity remains high. For investors, identifying durable premium demand will continue to be a dynamic assessment as the macro and geopolitical environment shifts.
Consumer discussions pointed to a consistent global pattern — a more uneven landscape and while premium segments are showing resilience across regions, value sensitivity remains high. For investors, identifying durable premium demand will continue to be a dynamic assessment as the macro and geopolitical environment shifts.
The luxury market in particular has shifted from broad-based growth to clear differentiation between categories and brands, noted Jeannette Smits van Oyen, Global Head of Consumer and Retail Investment Banking at J.P. Morgan.
The Chinese consumer represents roughly 20–30% of global luxury spend according to Bain, with around two thirds now occurring domestically. Recent softness should be read partly as a normalization from pandemic-era distortions rather than a structural retreat and the gap between strong and weak brands has widened rather than closed.
Brand alone is no longer sufficient. Success increasingly requires heritage, service and a differentiated experience that customers can feel and share, observed panelists.
In luxury hospitality, the shift from selling products to selling experiences has never been more pronounced. The most successful operators are no longer in the business of selling rooms, argued Benjamin Vuchot, CEO of The Hongkong and Shanghai Hotels, owner and operator of The Peninsula Group — they are selling time, moments and memories, with emotional value increasingly at the heart of the proposition.
Vuchot pointed to a strong rebound in international visitors at The Peninsula group, reversing the post-pandemic pattern, as premium travel demand is recovering.
On AI, panelists noted technology should serve human connection rather than replace it — automating back-of-house processes to free staff for guest-facing interactions.
In the broader consumer market, speakers highlighted how younger cohorts are increasingly rational — balancing price, quality and emotional value simultaneously. Deep localization is essential, said Albert Li, CFO of Tim Hortons China — the brand overhauled roughly 90% of its menu and rebuilt its supply chain from the ground up to meet local consumer expectations.
Insights
Conference photos
Key takeaways from the J.P. Morgan Global China Summit 2025
China: Key themes for investors to watch as trade talks continue
Despite the volatile start to the year, investors gathered at the 21st annual Global China Summit in Shanghai were optimistic on the path forward, with China’s economic outlook, trade dynamics, market fluctuations and industry innovation in focus at this year’s event.
After months of tit-for-tat exchanges between the world’s two largest economies, the U.S. and China have temporarily agreed to lower tariffs on each other’s products.
Following constructive talks in Geneva earlier this month, the U.S. and China reduced tariffs by 115% each for the next 90 days, announcing a 10% universal tariff rate.
The timing of a potential deal, China’s export-driven economy and the future of global supply chains were key themes at the two-day event.
“For the moment, we assume the temporary tariff reduction will stay for the rest of 2025. The current agreement presents a temporary pause that allows room for further reduction of tariffs. Equally, the bar for a potential deal between China and the U.S. is high and it could take longer than 90 days, so a possible resurgence in tariffs cannot be ruled out yet,” said Haibin Zhu, chief China economist and head of Greater China Economic Research at J.P. Morgan.
Longer term, panelists agreed that China’s focus on boosting domestic demand and household spending to reduce its dependence on exports will be vital for sustaining future growth.
Transshipment, or the rerouting of goods through a third country, was also a focus, as the U.S.–China trade dispute has led to significant changes in transshipment patterns, particularly involving countries like Vietnam. As trade tensions have escalated, Vietnam’s imports from trading partners around the world and exports to the United States reached record highs.
"The issue of transshipment will become more important as part of this new wave of U.S. trade agreements," said Joyce Chang, chair of Global Research at J.P. Morgan, in a panel discussion.
Onshoring and “friendshoring” — working with other trade partners on strategic issues such as shipbuilding — will also be key for the U.S. administration as it refines trade agreements in the region.
Like the rest of equity markets around the world, Chinese stocks have experienced significant volatility so far this year. However, recent trade developments have provided a more optimistic outlook, with potential for further gains as tariff negotiations progress and domestic policies support economic stability.
As of late May, Chinese equities have shown resilience, with the MSCI China index up over 15% for the year. The onshore CSI 300 Index lagged with a 1.4% return over the same period, marking a recovery from earlier losses.
“China equities had an earnings per share (EPS) down cycle from 2021 to early 2024 — but earnings have come back, particularly in the MSCI China In some of the key sectors we see some really strong growth, which would suggest upside to 2025 consensus estimates,” said Wendy Liu, head of China and Hong Kong Equity Strategy at J.P. Morgan, in a Bloomberg TV interview on the sidelines of the conference.
Liu said sectors to watch included communications (essentially internet platforms in gaming, media and entertainment), discretionary and healthcare. J.P. Morgan Research has a base case and bullish case year-end targets for the MSCI China of 80 and 89 respectively, which would represent double-digit upside from current levels of around 75 — contingent on a positive trade agreement between the U.S. and China after the current negotiation period, during which the index may trade range-bound.
Elsewhere, Amin Nasser, president and CEO of Saudi Aramco, highlighted China’s strategic importance to energy markets and his firm, which has significant investments and projects valued at over 240 billion yuan (around $35 billion).
On the state of the oil market, Nasser said there was growth of 1.7 million barrels [a day] in the first quarter year-on-year. Despite the volatility following tariffs, the market is healthy, particularly in China.
“China is one of the biggest importers of crude oil. As it stands today, [oil demand is] at around 17.4 million barrels [a day]. Considering that China’s indigenous production is around 4 million barrels a day, it imports close to more than 13 million barrels of crude every day. It is the largest in terms of imports globally and it’s an important market for all energy players around the world,” said Nasser in a conversation with Filippo Gori, co-head of Global Banking and CEO of EMEA at J.P. Morgan.
On the global deficit, Jamie Dimon, chairman and CEO of JPMorganChase, warned of the potential impact it could have on interest rates worldwide, urging investors not to become complacent.
“We have gone from a fairly benign inflationary environment of low rates to a slightly higher one. People think higher rates means the 30-year U.S. Treasury bond hits 5% — but why not 6%, what law says it can’t be 7%? I would be cautious of being complacent when it comes to the outlook for stock prices and bond spreads,” Dimon said.
Innovation across some of China’s specialist sectors was another area of interest, with a focus on assisted driving, robotics and biotech.
In assisted or partially automated driving, the proportion of vehicles equipped with assisted driving technologies is set to expand rapidly, according to Dapeng Gao, chairman and president of Desay SV, who discussed the outlook for the market with Nick Lai, head of Asia Autos Research at J.P. Morgan.
Level 2 assisted driving refers to partial automation and these systems typically offer functionalities such as traffic-aware cruise control, in-lane autosteer, automated lane changing and auto parking.
The regulatory environment in China has been tightening around autonomous driving technologies, but the penetration rate of Level 2 is still expected to more than double from 14% currently to around 40% in the next two years, Gao said.
Robotics was in the spotlight, with panelists discussing how innovation in the sector could address labor shortages, high costs and efficiency demands in industries such as logistics and warehousing.
Humanoid robots are also poised to enter consumer markets, driven by advancements in artificial intelligence (AI) and motion control technologies. In a panel on the future of automation, Shitao Gu, co-founder of MagicLab, said the group was focusing on reducing production costs through in-house development of core components, with an aim to provide cost-effective mass production.
In biotech, AI is helping to fuel drug discovery. The first drugs conceived entirely by AI could hit the market in just a few years, said Alex Zhavoronkov, CEO of startup Insilico, in a session on the sector.
The pharmaceutical industry has been harnessing AI to reduce the cost and the amount of time it takes for drugs to make it through the research and development (R&D) phase before going to clinical trials, but no AI-conceived drugs have been approved as yet.
Insilico have over 30 programs out of generative AI and Zhavoronkov hopes to see some approved in the next five years or so.
China’s government has emphasized the importance of boosting consumption to spur economic growth. For panelists in the consumer and retail sectors, changing consumer preferences, the need for constant innovation and the importance of localizing supply chains were top of mind.
In 2024, China’s household services consumption expenditure accounted for around 46% of total household consumption expenditure, official data showed. The significant portion of consumer spending currently directed toward services, rather than goods, provides opportunities for businesses in the region, according to speakers.
Yuanwen Sun, founder and CEO of TOP TOY — known for its focus on collectible and designer toys — said the group has been expanding its presence in the market by opening new stores and collaborating with various brands to offer a wider range of products.
The company aims to cater to both children and adult collectors, tapping into the growing trend of collectible toys and pop culture merchandise, along with demand for immersive retail experiences.
Joost Vlaanderen, president of Mondelez International (the parent company of Oreos) in Greater China, said having a local strategy was critical to success. The group is basing a headquarters and a large R&D center in China, so products can be developed locally.
Vlaanderen also said supply chain diversification is key to remaining competitive, with Mondelez aiming to produce as much locally as possible. The biscuit maker plans to harvest its first wheat grown in China to avoid the direct impact of tariffs.
Insights
Trade talks and volatility: An equity markets Q&A
Investors have had an unforgettable start to 2025, with tariffs, a stock market selloff felt in most major markets, followed by trade negotiations between the world’s two largest economies. Tom Summersall, head of Asia-Ex Equity Sales, shares his view on current market conditions and what investors need to look out for.
We came into the year reasonably optimistic, with a strong narrative supporting U.S. exceptionalism that had been pervasive across markets for some time. After Liberation Day, investors’ ability to forecast, whether that's economics or company earnings has been compromised and the lens through which markets are viewed is cloudier. For pension funds or long-only asset managers that track an index, many will have adjusted to more defensive stocks or reduced beta. For non-fundamental investors, systematic, quant or momentum strategies, or even multimanager platforms and hedge funds, leverage was likely reduced. As a function of the lower volatility since then, some of these systematic strategies are now starting to increase their leverage again. Meanwhile, fundamental investors have been watching and waiting, but others such as momentum or trend-focused strategies have been triggered to start buying the market, so we have a tactical view that equities can move higher.
There are a lot of signs showing that China is focused on providing comprehensive policy support to boost its domestic economy, pivoting from an export-led, investment-focused economy to a more domestic consumption-driven model. Secondary home sales in major cities in China are up 11 percent. Historically, the property market has been an important sentiment indicator and onshore retail sales are up 10 percent year-on-year in some categories. Looking at industrial commodities like copper and aluminum, prices are also broadly moving higher. In terms of tariffs, we've gone through the initial shock – market participants are defensively positioned and will continue to be buffeted by headlines, but current talks with the U.S. administration look increasingly constructive. From an equity valuation standpoint, Asia is significantly cheaper than other parts of the world and represents an opportunity.
In China, there has been a regulatory push to incentivize economic activity and investment that started long before tariffs. Certain sectors such as consumer and education saw valuations come under sustained pressure over the past few years as a result of the ‘common prosperity’ directive and are now benefitting from supportive policy. The travel and transportation sectors, particularly in the U.S. are being closely followed, as they track broader economy activity. Tech is always a focus especially at the moment, given the structural tailwind from AI. When combined with geopolitical crosscurrents, this makes for a complex and potentially volatile, backdrop. We will be featuring humanoid robots again at this year’s conference, which is another emerging global trend.
We know that some of the Q1 economic data and company earnings look artificially strong as companies were pulling forward demand and shipping products ahead of the implementation of tariffs. The earlier expectation of payback in the second half has been somewhat tempered by the tariff delays and hopes of progress in talks. In the U.S. that’s led us to reduce our probability of recession to below 50%, although there remains an economic drag. The forward-looking sentiment data (such as company purchasing manager indices – PMIs) has shown signs of caution on behalf of companies given the heightened uncertainty. The question that remains is whether the hard data on delivered economic outcomes follows lower or whether the recent news flow on tariffs rescues confidence. First quarter company earnings and management commentary so far has tended to be more positive than the market expected. That’s good news for equity markets.
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