HSBC: Now is the Right Time to Increase Exposure to Risk Assets

ChainCatcher news, according to Golden Ten Data, the stock market—especially tech stocks—has been somewhat jittery recently, but HSBC's multi-asset strategists believe now is the time to buy. HSBC points out that although the S&P 500 index is less than 5% away from its all-time high, market sentiment and positioning have already taken a significant hit.

In addition, the high-yield bond spread has widened by less than 30 basis points since October, and emerging market bond spreads are still narrowing, making the market in recent weeks appear rather unusual. They note that the VIX futures curve has shown a spot premium—which is uncommon—indicating that traders see the short-term market as more uncertain than the long-term. Most attribute this to concerns about the most speculative parts of the market, but even so, the current bottom-up consensus shows that the net profit of the S&P 500 excluding the tech sector is expected to decline by 8% quarter-on-quarter.

They stated, "Such low expectations actually set a lower bar for the fourth quarter earnings season at the beginning of 2026, and the Federal Reserve's rate cut in December should help ease tensions and improve market sentiment."

HSBC concluded: "This provides a good environment for increasing rather than reducing risk positions."