Q4 2024 Investment Outlook – An Optimist's Guide to a Shifting Landscape

HSBC Global Private Banking is continuing to advise high net worth and ultra high net worth clients to take an optimistic view on markets, in a year when it has paid to have put cash to work – with equities up strongly and bonds benefiting from rate cut expectations.

In its Q4 2024 investment outlook, An Optimist's Guide to a Shifting Landscape, HSBC Global Private Banking explained that while the US economy has slowed, it does not foresee an imminent recession. The quick market rebound after the sell-off at the beginning of August showed how investors are continuing to look for buying opportunities – supported by the prospect of rate cuts, corporate earnings improvement and innovation boosting productivity.

HSBC Global Private Banking's four investment priorities are:

• Targeting earnings endurance: Plenty of companies have shown they can deliver strong earnings despite moderate global growth. While the technology sector continues to appeal, other sectors are proving attractive alternatives to the tech mega-caps.
• Putting cash to work: The global rate-cutting cycle is well under way and cash is getting less attractive. We recommend locking in bond yields on quality credit before they fall further, and using multi-asset strategies to tap into a broad opportunity set.
• Bridging uncertainty: The US election, global monetary policy and geopolitical risks could trigger some market uncertainty in the coming months, but volatility strategies and hedge funds may protect against the downside while remaining invested.
• Diversifying in Asia: Asia's diverse and expanding capital markets offer attractive prospects for diversification, with promising opportunities from its resilient growth leaders and quality bonds, particularly in Japan, India and South Korea.

Willem Sels, Global Chief Investment Officer at HSBC Global Private Banking and Wealth, said: “It’s easy to feel nervous about the markets, but we are optimistic that diversified portfolios will continue to do well. While the landscape is shifting, the opportunity set is rich and diverse. A global mindset and a multi-asset approach are the way to go.”

Cheuk Wan Fan, Chief Investment Officer for Asia at HSBC Global Private Banking and Wealth, said: “With expected GDP growth of 4.7 per cent in 2024, Asia’s economic engine benefits from structural trends, AI-driven innovation and an investment boom fuelled by the supply chain revamp and green transformation.”