Core Insights - India's exports to China increased significantly by 67% in December, reaching $2 billion, while exports to the U.S. decreased by 1.8% to $6.8 billion [1] - The U.S. imposed 50% tariffs on India, affecting trade relations and prompting India to seek alternative markets [2] - India's exports to mainland China rose nearly 37% in the first nine months of the fiscal year ending March 2026, with Hong Kong shipments increasing over 25% [2] Trade Relations - China has become India's largest goods trading partner, with trade worth $110.20 billion from April to December 2025, surpassing the U.S. at $105.31 billion [4] - India has a trade surplus with the U.S. of over $26 billion, while the trade deficit with China has reached $81.7 billion during the same period [5] - In fiscal year 2025, India traded goods worth $131.84 billion with the U.S. and $127.71 billion with China, excluding Hong Kong [5] Diplomatic Engagements - India's Foreign Secretary met with a Chinese official to discuss improving bilateral ties, focusing on business and people-centric engagements [3] - Relations between India and China have been improving since a meeting between Prime Minister Modi and President Xi Jinping in September [3]

Summary of Key Points from the EM Equity Strategy Compass Industry Overview - The report focuses on Emerging Market (EM) equities, specifically the MSCI EM index, projecting a price target of 1,540 by the end of 2026, indicating approximately 13% upside from current levels [2][11]. Core Insights 1. Solid Fundamentals - EM is expected to achieve the highest EPS growth among major regions at +17% for 2026, up from +15% in 2025 [3][14]. - Valuations are currently at the 94th percentile compared to a 25-year history, suggesting that while they are stretched, they may be justifiable given the anticipated earnings growth [18][33]. 2. Federal Reserve Easing - Historical trends indicate that Fed easing typically benefits global equities, particularly in "soft landing" scenarios where economic growth continues without recession [4][21]. - EM and ex-US equities have historically performed well during such periods, suggesting potential for continued upside [24]. 3. AI Exposure - The AI thematic remains a significant driver for global equities, with EM stocks linked to AI expected to grow EPS by approximately 40% in 2026, compared to around 20% for major US companies [25][26]. - Despite recent volatility, EM AI stocks are still seen as offering attractive valuation-to-growth tradeoffs [26]. Country Allocation Adjustments - The EM country allocation is cyclically tilted with a focus on AI leverage: - **Upgrades**: Taiwan (to Overweight), UAE (to Overweight) - **Downgrades**: China (to Neutral), Poland (to Neutral), Chile (to Underweight) [6][51][53]. - Korea is highlighted as having the most bullish target with a potential upside of 37% [44]. Risks to the Outlook - Key risks include potential cracks in AI optimism, a slowdown in US economic growth, and ongoing trade tensions, particularly with China [28]. - A stronger USD could also pose challenges for EM equities, despite a weakening relationship between the dollar and EM performance [28]. Market Setup Macro Environment - The global economy is expected to maintain a "Goldilocks" scenario with resilient growth around 3%, projected to expand by 2.7% in 2026 and 2.8% in 2027 [29][30]. - EM growth is anticipated to slow slightly in 2026, primarily due to high base effects in tech exports, but regions outside Asia are expected to show solid growth [30]. Valuations - EM equities have re-rated significantly, trading above historical medians, yet still present a valuation discount compared to developed markets [33]. - Specific markets like LatAm are viewed as relatively cheap, while Asia is considered more expensive [33]. EPS Growth Projections - All major EM countries are expected to see EPS expansion in 2026, with Korea projected to lead at approximately +40% growth [35]. - The report indicates that the EPS growth and revision picture remains stronger in Taiwan, while China faces a lackluster macro outlook [51]. Conclusion - The overall outlook for EM equities remains constructive, supported by solid fundamentals, favorable macro conditions, and significant AI exposure, despite the presence of notable risks and valuation concerns [11][28].

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So how do you feel about India today under Prime Minister Modi. >> I feel very worried about it you know because um I mean I have a lot of friends in India who who are journalists and who who from whom I get interesting information about what's going on and and I think everybody is extremely concerned with the attack on freedoms um of journalists of writers of intellectuals of professors you know etc. There is a even beyond that there seems to be a desire to rewrite the history of the country. Um essentiall ...