HSBC: Now is a good time to increase exposure to risk assets.

PANews, November 24 - The stock market - especially tech stocks - has been somewhat anxious lately, but HSBC's multi-asset strategist believes that now is the time to buy. HSBC points out that although the S&P 500 index is less than 5% away from its historical high, market sentiment and positions have clearly been undermined. In addition, the high-yield bond spread has only widened by less than 30 basis points since October, while emerging market bond spreads have been narrowing, making the market over the past few weeks appear quite strange. They noted that the VIX futures curve has shown spot contango - which is uncommon, indicating that traders believe the short-term market is more uncertain than the long-term market. They largely attribute this to concerns about the most speculative parts of the market, but even so, the current bottom-up consensus expectations show that the net profits of the S&P 500, excluding the tech zone, are expected to decline by 8% quarter-on-quarter. They state, “Such low expectations actually set a lower threshold for the fourth-quarter earnings season in early 2026, and the Fed's rate cut in December should help ease tension and improve market sentiment.” HSBC concludes, “This provides a good environment for increasing rather than reducing risk positions.”