Asset Allocation form HSBC Sentiment has improved as inflation moves lower and activity data are holding up better than expected… …with China’s reopening the biggest upside risk for the global economy Early signs of consumer weakness are worth watching
We continue to operate in extraordinary times. Just as we are emerging to some sense of normality after the pandemic, the world continues to face instability. In the UK, we are experiencing a cost of living crisis and rising inflation.
Amid sticky inflation, central banks are continuing to maintain a hawkish stance with higher peak interest rates anticipated compared to last month. Nonetheless …
ECB forced to tighten more agressively
Biodiversity is equally vital to people and planet. It gives us clean air and water, food and medicines. As mentioned in The Economics of Biodiversity: The Dasgupta Review1, Biodiversity is the diversity of life and can be read at various
With today's stressed supply chains and elevated commodities prices, the chart below is food for thought. It shows that …
Welcome to our mid-year outlook. I’m pleased to share with you the findings of our latest Strategic Forum – that defines our views on the world’s economies and markets for the months to come. In our previous Strategic Forum in
At its November meeting, the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) left the target range for the federal funds rate at 0.00-0.25%. The Fed maintained its guidance on the policy rate, saying it expects to
Investment Monthly – November 2021: We maintain our preference for stocks over bonds as equity premiums remain significantly higher than those for fixed income assets, while on a historical basis, stocks outperform bonds while labour markets improve. A scenario of
Welcome to our mid-year Outlook, my first as the new chief investment officer at HSBC Asset Management. It is an honour to share with you our latest views on the world’s economies and markets. A huge thanks and best wishes
What to do in a negative-yield world? Declan O’Brien, Head of Infrastructure Research and Strategy and Perry Offutt, Head of Infrastructure Americas, give a deep-dive into the evolving and emerging infrastructure sector and the role it can play in investors’
Macro Insight: In late March, President Biden announced details of a further package – the $2.3tn American Jobs Plan. This set out major spending plans and tax changes for the US economy over the next 15 years (Figure 1).
NPC 2020 – No target but still focused In a delayed session of the National People’s Congress (NPC) China dropped its numerical growth target for 2020, reflecting significant macro headwinds from the COVID-19 pandemic and high level of external uncertainties
Welcome to our mid-year outlook for 2020 – six months that surely rank as the most extraordinary of our careers. Indeed, it is hard to put the enormity of what we have just been through into context. A global pandemic,
House views The global spread of COVID-19 and containment policies deployed to contain its spread have created an economic “sudden stop”. A sharp recession now seems inevitable, and there are many uncertainties about what follows. Market pricing discounts a 2008-like
EU finance ministers have agreed a EUR540bn package of fiscal measures to ease the economic impact of COVID-19 The package marks a significant first step in providing a joint response to COVID-19 but concerns remain Tensions could resurface at future
Market volatility has surpassed levels reached during the 2008 financial crisis. Global equities have entered bear market territory at the fastest pace ever. Corporates are under pressure from a global slowdown and lower oil prices Although aggressive policy action has
We expect that investors will require evidence that case growth is “under control” before a sustainable recovery in risk appetite can take hold. In the short-term, a cautious investment strategy remains warranted However, highly attractive valuations for risky asset classes
Investment Monthly – February 2020 We are living in an “age of uncertainty” with persistent uncertainties around the macro outlook. Geopolitical tensions have shown they have the capacity to create episodic volatility in markets. But we think it is important
We believe it makes sense to adopt a more neutral tactical view on developed market equities in such a highly uncertain and volatile environment However, we maintain a strategically pro-risk stance in the context of hugely improved relative valuations for
Bank of England cuts rates at emergency meeting… Amid increasing challenges to the UK growth outlook and financial market turmoil on the back of the global COVID-19 outbreak, early on 11 March the Bank of England (BoE) announced an emergency
Investment Monthly Uncertainty is likely to remain elevated, but we think turning defensive is the wrong strategy – this was costly for investors in 2019. Instead, we remain pro-risk in a multi-asset portfolio, underpinned by our “favourable baseline” view of
The Age of Uncertainty Welcome to our Investment Outlook for 2020, as we continue to live in an “age of uncertainty”. 2019 has been a year of contrast. On one hand, the narrative of the year in financial markets has
Macro Outlook – Global growth continues to face headwinds from a downturn in the industrial cycle and uncertainty related to trade tensions. Nevertheless, the trend in the global Nowcast remains broadly stable at around 2% – US growth remains robust
Macro Outlook Global growth continues to face headwinds from a downturn in the industrial cycle and uncertainty related to trade tensions. Nevertheless, the global Nowcast remains stable at around 2% US growth remains above trend but has become more dependent
EU agrees to extend Brexit deadline The European Union (EU) has agreed in principle to extend Article 50 of the Lisbon Treaty. This delays the UK’s scheduled departure from the European Union (EU) that was due to occur on 31
The US and China have agreed a truce in their trade conflict with a ‘mini deal’ that sees the US holding off on tariff increases scheduled for 15 October in exchange for some concessions from China, mainly around agricultural purchases
A surprise escalation of the US-China conflict in early August, and worries that this conflict will damage economic growth, led to a sell-off across risky asset classes in August. Meanwhile, expectations that the Fed will cut rates further supported a
As we enter the fourth quarter of the year, we are seeing an environment of coordinated monetary easing amongst central banks around the globe. Most recently on 18 September, the US reduced interest rates for the second time this year,
Investment returns have been strong across the board in 2019 so far. Fixed income asset classes are up around 10%, and equity markets and alternatives have done even better. But it hasn’t felt like a bull market environment for investors
At its September policy meeting, the European Central Bank (ECB) delivered a substantial monetary policy easing package, including a renewed programme of asset purchases Policy easing came on the back of downgrades to the economic projections and persistent downside growth
Trade tensions escalated after China announced additional tariffs on US goods and the US retaliated with an increase in tariffs on Chinese imports Meanwhile, Fed Chair Powell refrained from providing a clear steer on future interest rate policy, but reiterated
Financial market volatility has risen in August. This has come amid the ongoing US-China trade conflict (along with other geopolitical risks), and some weak economic data releases. Risk assets such as equities have sold off, while safe-haven assets have rallied
Fed cuts rates A lack of inflation pressure allows the US Federal Reserve (Fed) to lean against the increased downside risks to growth. While market pricing may prove to be too aggressive, some “insurance” policy easing is very likely The
The Federal Reserve reduces interest rates At its July meeting, the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) cut the target range for the fed funds rate to 2.00-2.25%, in line with market expectations. Two FOMC
On Thursday 1 August, US President Trump unexpectedly announced a plan to move forward with an additional 10% tariff on USD300bn worth of imported Chinese goods. The move is in addition to the USD250bn of Chinese products already subject to
Still reasonable global growth A combination of a reasonable global growth, policy support, and good relative valuations support overweight positions in selected fixed income and equity markets
The Federal Reserve left policy unchanged The US Federal Reserve (Fed) left the target range for the fed funds rate at 2.25-2.50% at its June meeting; the market had been pricing a 20-25% chance of a rate cut. One of
I hope you enjoy reading our mid-year Investment Outlook. In the pages that follow we set out to share our current thinking and the investment conclusions that follow. Perhaps surprisingly, given that there is much uncertainty, we have some clear
The trade conflict between China and US is back in focus. On 10th May, US took tariffs rates on USD250 billion of Chinese exports to 25% from 10%. Retaliation swiftly followed. China raised tariffs on USD60 billion of US goods
Asia ex Japan’s economy has been growing steadily and remains one of the fastest growing major regions in the world. The region is expected to grow at 5.7% in 2019, while G7 economies will grow at just around 1.6%. Asia’s
India insights Indian equities outperformed emerging markets by 8.2% in USD terms in May, fueled largely by anticipation of a favourable outcome in the election We expect the RBI to cut rates in 1HFY2020, with the rate cut possibly coming
How best meet your clients’ investment objectives Many of the multi-asset funds available today from different asset managers define their portfolios not by risk ranges, but by underlying asset exposures. While this gives the manager flexibility to reposition their portfolios,
For the past several years most investors have faced a simple but abiding problem: asset markets have been climbing for close to a decade and now nothing looks cheap. However, in 2018 things began to change. During the year, as
Across Asia, new risk-based insurance regulations are in various stages of development. From experience in Europe, we know that implementation of these new rules could have a profound impact on insurers’ investment strategy. In the fast-growing Asian insurance market, a
China macro update Defying global concerns around its growth, China’s first quarter GDP and March activity data provided further evidence that policy easing effects are coming through and growth is bottoming out, helped partly by an export recovery However, the
Due to take place on 23-26 May, the European Parliamentary (EP) elections are approaching fast. The final results will be communicated in the evening of 26 May At the time of writing, if polls are correct (1), the two mainstream
Does tactical asset allocation help? The cost of selling out
Key takeaways: Defying global concerns around its growth, China’s first quarter GDP and March activity data provided further evidence that policy easing effects are coming through and growth is bottoming out, helped partly by an export recovery However, the growth
