(Harvest) We started the year bullish on global growth, commodities, and emerging markets , and despite challenges in the second quarter, we maintain this view. We think events in Q2 were mainly a growth scare. Concerns about a slowdown in China and globally, along with trade tensions, helped trigger selloffs that resulted in local currency emerging markets debt falling over 10% —which is one of its more significant falls within a single quarter—and Chinese equities falling 20%. However, we think this global growth scare was overdone. Although U.S. growth has been strong, we think the perception that it is far ahead of the rest of the world is an exaggeration. Europe saw a slowdown in the first half of the year, while China is undergoing cyclical changes and taking deliberate steps to correct excesses in its financial system.

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