TechFlow, Nov. 24 — Stock markets — especially tech stocks — have felt a bit jittery lately, but HSBC's multi-asset strategists believe this is precisely the time to buy. Although the S&P 500 is less than 5% below its all-time high, market sentiment and positioning have clearly weakened, HSBC noted. Additionally, high-yield bond spreads have widened by less than 30 basis points since October, while emerging market debt spreads continue to narrow, making recent weeks feel somewhat strange. They pointed out that the VIX futures curve has entered contango — an uncommon situation indicating traders see near-term markets as more uncertain than longer-term ones. Much of this is attributed to concerns over the most speculative corners of the market, but even so, current bottom-up consensus estimates show that S&P 500 earnings excluding the tech sector will decline 8% quarter-on-quarter. "Such low expectations set a lower bar for Q4 2025 earnings season," they said, "and a Fed rate cut in December should help ease tensions and improve market sentiment." HSBC concluded: "This creates a favorable environment for increasing rather than reducing risk exposure." (Jinshi)
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