December 21, 2022

Institutional Views: Bank of America, HSBC and Credit Suisse

Dec 21, 2022

Individual investors are often bombarded with specific stock calls and targets.

However, we believe you can get a better medium to long term perspective by considering asset class, sector, thematic and macro economic views.

To help you, every week, we pour through the research produced by some of the larger institutions, and summarize their market thoughts.

Below are this week’s 3 updates:

Bank Of America
Forecast recession in H123 and thus favour bonds over equities. The latter could rebound in H223. Like small-cap and EM stocks. Rates to peak and corporate profits should bottom out by mid-23. 60/40 portfolio to return to positive territory in 2023. China rebound in Q323 with potential increased demand for commodities. US mild downturn. Risks are higher energy prices, US-China trade war and regime shift in Iran.

Fed rate terminates at 4.75% in Q1 2023. US growth below-trend.   UK & Europe in recession. Seek investment grade credit & quality   equities that generate cash with low debt levels. USD remains bullish until   year end. Food, Energy, Staples, & Infrastructure attractive.   Diversification key to offset uncertainty. China to rebound mid-year. Will   take longer for inflation to return to 2% target than CB forecasts. Investor   sentiment net positive for EM markets.

Credit Suisse
UK in recession, Europe to enter a recession, US mild growth,   China to bounce back. Risk to US growth is oil price rally and deeper   European recession. Global Industrial Production momentum is contracting   albeit global risk appetites are normal. In 2023, despite inflation peaking,   rate hikes to continue throughout the year and any potential easing would be   in 2024. Like US IG, EM $ FI debt. HY FI to underperform.

* Please note these are not the thoughts or analysis of illio but the respective institutions. We have summarized what we believe are key points. We assumes no responsibility or liability for any errors or omissions in the content of this site. The information contained herein is not intended to be a source of advice and the information contained in this website does not constitute investment advice.

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