Latest news with #HSBCGlobalResearch
Yahoo
09-07-2025
- Business
- Yahoo
These 3 'pain trades' could catch investors off guard in the 2nd half of the year
Stock investors are operating on some assumptions that could be proven incorrect, HSBC said. The bank said it identified three "pain trades" if the US market bucks Wall Street's expectations. Strategists said they saw the potential for a melt-up in the stock market to continue. There are a handful of consensus views on Wall Street that risk being proven incorrect in the back half of this year, raising the risk for some traders betting on things like the impact of tariffs and the direction of US stocks. That's according to strategists at HSBC Global Research, who see a risk that markets may not react to headwinds like tariffs and the GOP tax bill in the way that most investors may be expecting. In a note to clients on Monday, the bank said it identified several "pain trades" if the market bucked expectations on Wall Street in the second half of the year. "A lot of views going into H2 have become quite consensus and widely-held. Therefore some of our sentiment and positioning indicators are showing increasing signs of stretched views. What if Q3 turns out to be the quarter where these widely-held views unwind though?" the bank wrote. The analysts added that they believed the US stock market could continue to see "broad-based melt-up" — a situation where risk assets keep moving higher — contrary to some of Wall Street's gloomier forecasters. Here are three of the largest pain trades the bank sees potentially impacting investors. There's a growing view that the US stock market will underperform international stocks this year. Investors are mainly concerned that tariffs could hit corporate earnings and increase uncertainty in the US, which could hit high stock valuations. In a survey conducted by Bank of America in June, 54% of global fund managers said they believed international equities would be the best-performing asset over the next five years, compared to just 23% of investors who said they believed US stocks would be the top asset. But there are a few reasons the US could continue to dominate the world market, HSBC said. For one, corporate earnings may not be as affected by tariffs as investors are predicting. Strategists estimated that around 20% of the cost of goods sold, or goods that American firms need to make profits, are imported from other countries. Meanwhile, large-cap and mega-cap firms are benefiting from a weaker dollar, which could make US products more attractive to consumers abroad, HSBC said. HSBC said weekly announcements of stock buybacks from US companies also hit a record high after the first-quarter earnings season. "Yes the US equity market is expensive. That's because it makes the most money," strategists said. "We can easily envisage a backdrop where things like the big beautiful bill, potential efforts around deregulation coupled with further evidence of profitability benefits from AI leads to an even larger gap in return on equity between the US and RoW equities in the coming quarters." Most investors also expect economic growth to slow sharply in the US and the broader global economy in the second half. But there are several indicators of economic expectations that have shown soft signs of a rebound in recent weeks, HSBC said. The Bloomberg consensus GDP forecast diffusion index, one measure of GDP growth expectations, perked up in June. High-frequency consumer spending datapoints have also shown a slight uptick, a possible sign that consumers are beginning to feel better about what's ahead. "Despite the calls for a slowdown, high-frequency data show that after a temporary slump in May, US activity has in fact recovered again in June," strategists said, adding there could be upside risk if political and economic uncertainty begins to decline and the unemployment rate remains low in the US. Most forecasters also don't expect the US dollar to recover in value anytime soon, given the uncertainty surrounding geopolitics and trade. The US Dollar Index, which weighs the value of the greenback against a basket of other major currencies, has declined 10% year-to-date. This embedded content is not available in your region. HSBC's base-case is that the dollar will remain "soft" in the second half of the year, but there are two ways the US dollar could stage a recovery, something that would be "surprising yet painful" to investors, strategists said. There's a large global shock that drives currency traders back to the US dollar. The US dollar saw a brief spike as conflict between Israel, Iran, and the US unfolded last month. US policy uncertainty and structural forces stop weighing on the dollar. That could indicate to markets that the narrative of US exceptionalism is returning, causing the dollar to trade more in-line with what interest rates would imply. In that scenario, the Dollar Index could strengthen to 102, HSBC estimated, implying a 5% increase from current levels. Read the original article on Business Insider
Yahoo
08-07-2025
- Business
- Yahoo
These 3 'pain trades' could catch investors off guard in the 2nd half of the year
Stock investors are operating on some assumptions that could be proven incorrect, HSBC said. The bank said it identified three "pain trades" if the US market bucks Wall Street's expectations. Strategists said they saw the potential for a melt-up in the stock market to continue. There are a handful of consensus views on Wall Street that risk being proven incorrect in the back half of this year, raising the risk for some traders betting on things like the impact of tariffs and the direction of US stocks. That's according to strategists at HSBC Global Research, who see a risk that markets may not react to headwinds like tariffs and the GOP tax bill in the way that most investors may be expecting. In a note to clients on Monday, the bank said it identified several "pain trades" if the market bucked expectations on Wall Street in the second half of the year. "A lot of views going into H2 have become quite consensus and widely-held. Therefore some of our sentiment and positioning indicators are showing increasing signs of stretched views. What if Q3 turns out to be the quarter where these widely-held views unwind though?" the bank wrote. The analysts added that they believed the US stock market could continue to see "broad-based melt-up" — a situation where risk assets keep moving higher — contrary to some of Wall Street's gloomier forecasters. Here are three of the largest pain trades the bank sees potentially impacting investors. There's a growing view that the US stock market will underperform international stocks this year. Investors are mainly concerned that tariffs could hit corporate earnings and increase uncertainty in the US, which could hit high stock valuations. In a survey conducted by Bank of America in June, 54% of global fund managers said they believed international equities would be the best-performing asset over the next five years, compared to just 23% of investors who said they believed US stocks would be the top asset. But there are a few reasons the US could continue to dominate the world market, HSBC said. For one, corporate earnings may not be as affected by tariffs as investors are predicting. Strategists estimated that around 20% of the cost of goods sold, or goods that American firms need to make profits, are imported from other countries. Meanwhile, large-cap and mega-cap firms are benefiting from a weaker dollar, which could make US products more attractive to consumers abroad, HSBC said. HSBC said weekly announcements of stock buybacks from US companies also hit a record high after the first-quarter earnings season. "Yes the US equity market is expensive. That's because it makes the most money," strategists said. "We can easily envisage a backdrop where things like the big beautiful bill, potential efforts around deregulation coupled with further evidence of profitability benefits from AI leads to an even larger gap in return on equity between the US and RoW equities in the coming quarters." Most investors also expect economic growth to slow sharply in the US and the broader global economy in the second half. But there are several indicators of economic expectations that have shown soft signs of a rebound in recent weeks, HSBC said. The Bloomberg consensus GDP forecast diffusion index, one measure of GDP growth expectations, perked up in June. High-frequency consumer spending datapoints have also shown a slight uptick, a possible sign that consumers are beginning to feel better about what's ahead. "Despite the calls for a slowdown, high-frequency data show that after a temporary slump in May, US activity has in fact recovered again in June," strategists said, adding there could be upside risk if political and economic uncertainty begins to decline and the unemployment rate remains low in the US. Most forecasters also don't expect the US dollar to recover in value anytime soon, given the uncertainty surrounding geopolitics and trade. The US Dollar Index, which weighs the value of the greenback against a basket of other major currencies, has declined 10% year-to-date. HSBC's base-case is that the dollar will remain "soft" in the second half of the year, but there are two ways the US dollar could stage a recovery, something that would be "surprising yet painful" to investors, strategists said. There's a large global shock that drives currency traders back to the US dollar. The US dollar saw a brief spike as conflict between Israel, Iran, and the US unfolded last month. US policy uncertainty and structural forces stop weighing on the dollar. That could indicate to markets that the narrative of US exceptionalism is returning, causing the dollar to trade more in-line with what interest rates would imply. In that scenario, the Dollar Index could strengthen to 102, HSBC estimated, implying a 5% increase from current levels. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
07-07-2025
- Business
- Business Insider
These 3 'pain trades' could catch investors off guard in the 2nd half of the year
Stock investors are operating on some assumptions that could be proven incorrect, HSBC said. The bank said it identified three "pain trades" if the US market bucks Wall Street's expectations. Strategists said they saw the potential for a melt-up in the stock market to continue. There are a handful of consensus views on Wall Street that risk being proven incorrect in the back half of this year, raising the risk for some traders betting on things like the impact of tariffs and the direction of US stocks. That's according to strategists at HSBC Global Research, who see a risk that markets may not react to headwinds like tariffs and the GOP tax bill in the way that most investors may be expecting. In a note to clients on Monday, the bank said it identified several " pain trades" if the market bucked expectations on Wall Street in the second half of the year. "A lot of views going into H2 have become quite consensus and widely-held. Therefore some of our sentiment and positioning indicators are showing increasing signs of stretched views. What if Q3 turns out to be the quarter where these widely-held views unwind though?" the bank wrote. The analysts added that they believed the US stock market could continue to see "broad-based melt-up" — a situation where risk assets keep moving higher — contrary to some of Wall Street's gloomier forecasters. Here are three of the largest pain trades the bank sees potentially impacting investors. 1. US stocks keep outperforming the rest of the world There's a growing view that the US stock market will underperform international stocks this year. Investors are mainly concerned that tariffs could hit corporate earnings and increase uncertainty in the US, which could hit high stock valuations. In a survey conducted by Bank of America in June, 54% of global fund managers said they believed international equities would be the best-performing asset over the next five years, compared to just 23% of investors who said they believed US stocks would be the top asset. But there are a few reasons the US could continue to dominate the world market, HSBC said. For one, corporate earnings may not be as affected by tariffs as investors are predicting. Strategists estimated that around 20% of the cost of goods sold, or goods that American firms need to make profits, are imported from other countries. Meanwhile, large-cap and mega-cap firms are benefiting from a weaker dollar, which could make US products more attractive to consumers abroad, HSBC said. HSBC said weekly announcements of stock buybacks from US companies also hit a record high after the first-quarter earnings season. "Yes the US equity market is expensive. That's because it makes the most money," strategists said. "We can easily envisage a backdrop where things like the big beautiful bill, potential efforts around deregulation coupled with further evidence of profitability benefits from AI leads to an even larger gap in return on equity between the US and RoW equities in the coming quarters." 2. The US economy avoids a recession Most investors also expect economic growth to slow sharply in the US and the broader global economy in the second half. But there are several indicators of economic expectations that have shown soft signs of a rebound in recent weeks, HSBC said. The Bloomberg consensus GDP forecast diffusion index, one measure of GDP growth expectations, perked up in June. High-frequency consumer spending datapoints have also shown a slight uptick, a possible sign that consumers are beginning to feel better about what's ahead. "Despite the calls for a slowdown, high-frequency data show that after a temporary slump in May, US activity has in fact recovered again in June," strategists said, adding there could be upside risk if political and economic uncertainty begins to decline and the unemployment rate remains low in the US. 3. The US dollar makes a comeback Most forecasters also don't expect the US dollar to recover in value anytime soon, given the uncertainty surrounding geopolitics and trade. The US Dollar Index, which weighs the value of the greenback against a basket of other major currencies, has declined 10% year-to-date. HSBC's base-case is that the dollar will remain "soft" in the second half of the year, but there are two ways the US dollar could stage a recovery, something that would be "surprising yet painful" to investors, strategists said. There's a large global shock that drives currency traders back to the US dollar. The US dollar saw a brief spike as conflict between Israel, Iran, and the US unfolded last month. US policy uncertainty and structural forces stop weighing on the dollar. That could indicate to markets that the narrative of US exceptionalism is returning, causing the dollar to trade more in-line with what interest rates would imply. In that scenario, the Dollar Index could strengthen to 102, HSBC estimated, implying a 5% increase from current levels.
India.com
02-07-2025
- Automotive
- India.com
Retail Vehicle Sales In India Surpass Wholesales In June, Driven By Discounts, EV Push
New Delhi: Retail registrations in the Indian automobile market outpaced wholesale dispatches across key segments in June 2025, a new report said on Wednesday. While two-wheeler (2W) retail demand continued at a slow pace, commercial vehicles (CVs) and passenger vehicles (PVs) saw a jump in retail sales -- mainly driven by deep discounts, according to HSBC Global Research. The report also highlighted strong tractor sales, supported by early and widespread monsoons, and noted a rising adoption of electric vehicles, especially battery electric four-wheelers (e4Ws). In PVs, despite muted demand, retail sales were better than wholesales, thanks to high discounts. However, overall wholesale volumes remained low as manufacturers preferred inventory rationalisation. Maruti Suzuki reported a 6% year-on-year (YoY) decline in total volumes, even as exports rose 22%. Mahindra & Mahindra (M&M), however, bucked the trend with an 18% rise in SUV wholesales, clocking 47,300 units. The report further noted that the upcoming festive season may provide a boost to PV demand, but discounts are expected to remain elevated until then. In the 2W segment, the impact of the new ABS rule for entry-level bikes is likely to prompt some advance stocking by manufacturers toward the end of 2025, according to the report. TVS emerged as the top performer with a 20% jump in overall 2W volumes, including a 10% rise in domestic sales and a 54% spike in exports. Bajaj Auto saw its domestic volumes dip by around 16%, but its exports grew by about 18%. Royal Enfield (RE) reported a 16% rise in domestic volumes and nearly 79% jump in exports, said the report.
CNBC
16-06-2025
- Business
- CNBC
What it would take for the stock market to really start to worry about geopolitics
Equity and energy markets appeared to shake off concerns of a wider conflict in the Middle East on Monday, reversing some of the moves from late last week and suggesting that it may take significant military escalation to cause a more lasting sell-off. Traders who look beyond geopolitical issues are not unusual, and this conflict has yet to create the type of damage that has hurt markets in the past, said Henry Allen, London-based macro strategist at Deutsche Bank. "Historically, it's only been when it's affected macro variables like growth and inflation. So for markets, the geopolitical events that mattered were the stagflation shocks, like the 1970s oil crises, the Gulf War in 1990 and Russia's invasion of Ukraine in 2022. Today, we haven't seen a shock on that scale so far," Allen wrote in a report to clients. West Texas Intermediate crude futures briefly traded above $77 per barrel on Friday but were below $72 on Monday afternoon. The global benchmark for oil prices, Brent crude, is still trading below its average price in 2024, Allen noted. @CL.1 5D mountain Oil futures have retreated from their Friday highs. In a separate note, another strategist at Deutsche Bank said that the equity market's current set-up could make it even more resilient than the historical data shows. "Historically, the S & P 500 tends to fall around -6% in the three weeks following a geopolitical shock, only to recover fully over the subsequent three weeks," Jim Reid, the bank's global head of its fundamental credit strategy group, wrote. "Our strategists argue that the bar for a more significant sell-off is higher this time, as equity positioning is already quite light." The moves on Monday came as Iran and Israel continued to attack one another. NBC News , however, reported that Iran was asking other Middle East nations to push President Donald Trump to press Israel for a ceasefire in exchange for flexibility on nuclear talks. To be sure, the conflict between Iran and Israel would focus investor attention more if it drives up inflation by disrupting the oil market. "Although equity markets have historically proven quite resilient to geopolitical events — in 60% of the major events since 1940, U.S. equities were up in the subsequent three months — the main exception has been when there was an oil price shock," according to Alastair Pinder, head of emerging markets and global equity strategist at HSBC Global Research. "In such instances, global equities fell 8% over the next two months," he said in a note to clients. Inflation remains near top of mind for investors, as major data series still show that the annual rate of price increases remains above the Federal Reserve's 2% target. Wall Street will get an updated look at how the central bank views inflation on Wednesday, when a new policy statement and economic projections are released.
