Fidelity International has announced that since the outbreak of the pandemic, the global economy and markets have shown resilience with sustained consumer spending worldwide. The global economy has slowed down but remains robust. Fidelity believes that economic slowdown continues to be a significant factor on the path to a soft landing. In recent years, central banks around the world have been focusing on suppressing inflation, which has only recently come under control. Concerns about stagflation risks that were prevalent last year seem to have eased, but the market is expected to be more volatile and have larger fluctuations compared to the quantitative easing period. Fidelity is closely monitoring any signs of weakening in the US job market and trends indicating consumers are depleting their savings, while also paying attention to the effectiveness of the support measures recently introduced by the People's Bank of China. Fidelity believes the possibility of an economic soft landing is the highest, but it is necessary to remain flexible and seize market opportunities. The interest rate cuts by the US and other countries in September are expected to make the path towards a soft landing smoother. With inflation concerns easing, central banks worldwide are able to respond to economic slowdown by cutting interest rates. Quantitative easing is expected to continue, but the extent of monetary easing before the end of the year is still uncertain. The support measures recently introduced by the People's Bank of China include interest rate cuts, mortgage rate reductions, and new rounds of monetary tools to support the stock market, which are expected to support asset prices in the short term. However, the long-term performance of the stock market still depends on corporate profitability. Whether the recent support measures can drive long-term economic development remains to be seen. Global leaders are clearly moving towards more monetary and fiscal policies to cushion economic cycle fluctuations. Due to the interest rate cuts by the Federal Reserve driving periodic stock market increases, Fidelity's quantitative model is no longer focused on hedging and is capitalizing on market opportunities triggered by election uncertainties, such as potentially positive performance of US mid-cap stocks and emerging market government bonds, despite being higher-risk categories. The year 2024 is expected to be the year with the highest election and political risks in decades, with various complex geopolitical risks bringing uncertainty to global market risks. The long-term abundant liquidity in the market has decreased, and the future fiscal policies will be heavily impacted by the post-US election relations with mainland China and related trade policies. Structural growth themes from the past year, such as the commercialization of artificial intelligence technology, continuous investment in grid upgrades by governments worldwide, and healthcare as a defensive and long-term growth investment theme, are expected to continue. Currently, the economy is in the mid-to-late stages of the economic cycle, with key factors that influence the economy still uncertain, high market volatility, but potentially positive returns. For Asian investments, adopting a strategy that aligns with the prevailing trend in the fourth quarter of 2024 is recommended. Investment risks outside of the Asian region have increased, from the slowdown of the US economy, shift in monetary policies, to geopolitical concerns. Holding bonds for defense purposes while carefully selecting stocks can help seize market opportunities in the environment of interest rate cuts and market fluctuations. Fidelity International Asia Fixed Income Investment Director, Zhou Lei, stated that Asia's interest rate decisions have continued to be influenced by the hawkish position of the Federal Reserve, as local interest rate cuts would widen the interest rate differential with the US, potentially leading to local currency sell-offs. This situation changed only after the Federal Reserve announced a 0.5% rate cut in September. Given that Asia, except for Japan, has positive real interest rates, Fidelity expects the US rate cut to provide room for most Asia central banks to lower rates. The Indonesian central bank, anticipating the Federal Reserve, was the first to announce a rate cut of 0.25% to 6%, the first cut in over three years. During a rate-cut cycle, investors should have more confidence in investing in medium- to long-term high-quality bonds, including government bonds and investment-grade corporate bonds. Challenges facing the US economy are likely to be reflected in the stock market, such as impacts on export revenues for exporters, leading to pressure on their profits. However, many choices remain in the stock market, particularly in companies benefiting from artificial intelligence, energy transformation, and supply chain relocation. Fidelity is focusing on the valuation and defensiveness of companies to increase portfolio resilience against further impacts in the short term. Furthermore, the outlook for the Asian market also depends on the performance of the two major economies, China and Japan. As Chinese mainland consumers and property buyers remain cautious, China is still seeking economic growth drivers, with a challenge to achieve an annual economic growth rate of around 5% by the end of the year. Chinese policymakers are working on improving investor confidence, including lowering initial requirements, further rate cuts, and committing to increasing stock market liquidity starting in September. Although China is avoiding massive credit stimulus, these measures focus on stimulating local demand, which could boost market sentiment. Despite adjusting for inflation, China's long-term low interest rates, which remain positive, will drive Chinese bond prices upward. In the Chinese stock market, defensive industries such as banks and utilities show higher resilience. The political meeting in October and the Central Economic Work Conference at the end of the year could propose more policy adjustments, but given external uncertainties like the US elections, policy changes are not expected to be significant. After escaping deflation, Japan is now guarding against inflation with the aim of maintaining inflation above 2% set by the Bank of Japan next year, giving the Bank of Japan confidence to gradually raise interest rates over the coming seasons. The upward trend in Japan's policy interest rates will continue, but the strong reaction to Japan's 15 basis points rate hike in July this year may slow down the pace of interest rate hikes. Small businesses that have relatively lagged in Japan's stock market during the past year's upward trend are expected to catch up. However, any change in US trade policies could affect the Japanese stock market, and the potential risk of a change in the prime minister of Japan is another potential risk. From the population dividend in India and Southeast Asia to the development of artificial intelligence and energy transformation in the region, there is strong evidence that the Asian economy has long-term structural growth. As the market becomes increasingly sensitive to short-term risks, Fidelity expects the market to reevaluate these structural growth factors, with investors turning from markets mainly dominated by semiconductors in Taiwan and South Korea to the ASEAN markets that are expected to benefit more rapidly from quantitative easing policies. Furthermore, the fundamentals of the Indian market are stable, with an economic growth rate not to be underestimated, reaching 7% this year. Fidelity remains optimistic about India's long-term prospects. However, some industries that have experienced a long upward trend may struggle to support high valuations, and potential unwinding of yen carry trades could lead speculative funds to exit crowded and popular stock markets. On the other hand, Indian bonds being included in global benchmark indices, with positive real interest rates, make the bond market investment outlook more attractive.