It’s a good time to add risk, says HSBC

Stock markets – especially tech – have been jittery, but HSBC multi-asset strategists say it’s a great time to buy.

HSBC stated that sentiment and positioning have taken a major hit, even though the S&P 500 is down less than 5% from its all-time high. Add to that the fact that high yield spreads have widened by less than 30bps since October and emerging market debt spreads are tightening, and we can’t deny that it’s been a strange few weeks.

They show that the VIX futures curve is in retrogression – an unusual situation. It is also a sign that traders think short-term market conditions are more volatile than long-term – and they calculate cross-asset buying and selling ratios that are in ‘bearish territory’.

They mostly see this as a concern in the most speculative parts of the market, including crypto. Nevertheless, the bottom-up consensus now expects S&P 500 net income excluding the technology sector to fall by 8% quarter-on-quarter.

“Such low expectations create an even lower bar for the Q4 reporting season in early 2026,” they said, and “A December
Source: Reuters