HSBC states gentle landing could enhance global equities by 15%
As per HSBC, worldwide equities appear ready for a substantial rally in the upcoming year if central banks commence easing fiscal policy and the Federal Reserve achieves a gentle landing.Thank you for reading this post, don't forget to subscribe!
“We anticipate global equity markets to climb 15% until the conclusion of 2024,” Alastair Pinder expressed in a memo to clients. “However, amidst decelerating economic growth and declining interest rates, we believe the range of the market will rapidly narrow, leaving a considerable portion of the market submerged, while US dominance is expected to persist.”
In past instances where the Fed executed a gentle landing, the S&P 500 has increased approximately 22% amid a pause in hikes and six months after the bank initiated cuts, he highlighted.
Considering this configuration, Pinder favors the technology and consumer discretionary sectors, convinced that risks appear more favorable following the recent drop in equities.
Fed’s Goolsby suggests ‘golden path’ still achievable
Chicago Federal Reserve President Austin Goolsbee stated on Tuesday that a gentle landing remains a possibility as the central bank attempts to address inflation without causing significant damage to the economy.
“Due to some peculiarities in this moment, the golden path is likely…that we can reduce inflation without a recession,” Goolsbee said on CNBC’s “Squawk Box.”
Goolsby added that the decline in price pressures might resemble the sharpest contraction in inflation witnessed in the last century.
– Yun Lee
US crude has dropped below $78 per barrel, reaching its lowest level since July.
US crude oil prices plunged nearly 4% to their lowest level since July as feeble economic data raised concerns that the Israel-Hamas conflict could escalate into a broader regional dispute.
West Texas Intermediate declined by $3.09, or 3.82%, to $77.73 per barrel, while Brent fell by $3.19, or 3.75%, to $81.99 per barrel, both hitting their lowest prices since July.
The decline follows a more substantial than anticipated decrease in China’s exports in October, an indication of diminishing global demand.
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Wolfe Research suggests market rally might be transient
Wolfe Research strategist Rob Ginsburg mentioned that the rally could soon halt in early November if the trading activity at the start of the year is any indication.
“Each rally since the July peak has stalled prior to achieving a new 1-month high before reaching a new 1-month low…the definition of a downtrend,” Ginsburg said.
Naturally, he also affirmed that certain momentum indicators “were positive for all indices (last week), and today we see that confirmed at the stock level.”
– Fred Imbert