Investors are too pessimistic about the global economy, US-China trade war, says HSBC Global Asset Management
- US economy returning to a normal rate of growth, says Bill Maldonado, HSBC Global Asset Management’s APAC chief investment officer
- More accommodative monetary policy is creating a favourable environment for equities
Investors are being too pessimistic about the global economy and the effects of the trade war between the United States and China, according to HSBC Global Asset Management.
Bill Maldonado, the chief investment officer for Asia-Pacific, said that this year has been a much stronger one for markets than 2018, with strong returns in a “low inflation, low-interest-rate world”.
“We should keep calm and carry on. It’s important not to get too distracted by the pessimism, on the trade dispute, on the economy and everything else,” he said. “The asset that can benefit the most from this is emerging markets.”
Maldonado, who is also the firm’s global chief investment officer for equities, said that more accommodative monetary policy from the US Federal Reserve and the People’s Bank of China, combined with attractive valuations are creating a favourable environment for stocks, which have lagged other asset classes.
The Fed’s pivot earlier this year from a tightening stance to a more dovish policy has been an important theme for investors, driving gains in fixed income and other asset classes, he said.
The market expects the central bank could cut rates as soon as later this month and may reduce them by as much as 75 basis points this year.