If a recession materialises in the United States this year, the relative performance of U.S. and Asian equities will likely be quite different from what investors have seen in past decades. Indeed, the latter may be the ‘risk-off’ trade this time around.
The U.S. economy contracted modestly in the first quarter, based on the initial estimate released on Wednesday. While that’s only one quarter of negative growth, there are other nascent signs that a U.S. recession could already have started.
