On May 18th, companies such as Morgan Stanley Investment Management, AQR Capital Management, Bank of America, and Franklin Templeton are betting that the situation may eventually shift towards stocks that benefit developing markets. Michael Hartnett, a strategist at Bank of America, referred to them as the ‘next bull market’. AQR predicts that in the next 5 to 10 years, their annual returns in local currency will approach 6%, surpassing the 4% increase in US stock prices in US dollars. The S&P 500 index has performed averagely this year, while similar indices in emerging markets have risen by 10%, igniting market hope that the stark pattern of over 400% surge in US stocks and only a slight 7% increase in emerging market stocks over the past 15 years may come to an end. The underlying factors include the weakness of the US dollar, severe fluctuations in the S&P index, and doubts about the safe haven status of US bonds. As the Trump administration launches a trade war, investors are increasingly looking beyond the United States. Franklin Templeton investment strategist Christy Tan said she strongly recommends emerging market bonds as a substitute for US Treasury bonds, “We believe that the US market is no longer unique for the time being
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