Home Capital Global Markets

HSBC strategists expect fading stocks rally in challenging year

Bloomberg1/10/2022 8:28 PM GMT+08  • 2 min read
HSBC strategists expect fading stocks rally in challenging year
"We still think the consensus is too sanguine on the outlook for risk assets."
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

A lose-lose situation may be emerging for risk assets this year, according to HSBC strategists.

If economic growth rebounds in line or above expectations, this will open the door for “fairly aggressive” tightening from the U.S. Federal Reserve, HSBC strategists led by Max Kettner said in a note. On the other hand, even if supply chain issues dampen recovery--a scenario that HSBC sees as more probable - the Fed is unlikely to quickly change its strategy, resulting in “further deterioration of the growth-inflation trade-off.”

Worse still, a combination of both scenarios could play out: “If we get a combination of both decelerating growth and more tightening priced in the next six months, then the first half could indeed be quite nasty for risk assets,” Kettner said by email.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.