Investment Monthly: Solid growth drivers should further boost earnings

Key takeaways

While strong earnings momentum and Fed rate cuts remain growth drivers for US equities, the Republicans’ clean sweep and Mr. Trump’s pro-growth policies prioritising tax cuts and deregulation should further bolster IT, communications, energy, financials and industrials.

Still, it’s crucial to enhance portfolio resilience to withstand geopolitical and policy risks. Despite tighter credit spreads and limited price gains, bonds should outperform cash as interest rates fall and investment grade credit still offers attractive yields. Multi-asset strategies can help capture growth opportunities while managing downside and duration risks. Moreover, we see opportunities in renewable energy, infrastructure and gold to achieve greater diversification.

In addition to a RMB6 trillion fiscal package approved by China’s NPC, we see positive signs in domestic consumption during the “Double 11” shopping festival. Asia remains a key growth engine for global growth, supported by India’s strong cyclical and structural growth, Singapore’s attractive yield and large REIT exposure, as well as Japan’s reflation tailwind and corporate governance reforms. Domestic industry leaders are better positioned to withstand US tariff risks.

https://www.hsbc.com.my/wealth/insights/asset-class-views/investment-monthly/2024-12/

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Publish Date: Mon, 02 Dec 2024, 08:07 AM

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