Use pullback to add to stocks, HSBC says

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Use pullback to add to stocks, HSBC says

Investing.com -- HSBC believes investors should take advantage of the recent market pullback to increase exposure to U.S. equities, citing contrarian buy signals in key sentiment and positioning indicators.After a relief rally in August, concerns about a potential U.S. recession returned last week.

The bank believes inflation is no longer a primary concern, with various measures having eased significantly since April. As a result, the bank expects the Federal Reserve to begin a rate-cutting cycle, starting with a 25-basis-point cut in September. From an asset allocation perspective, HSBC highlights large shifts in sentiment and positioning since mid-July.

The bank is also closing its overweight position in high-yield credit, shifting to neutral on U.S. high-yield bonds, and extending its overweight position in emerging market debt.

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