HSBC Says 'Cash Is King'
Slower earnings and stubborn valuations still weigh on stocks.
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Despite some recovery in the world's equity markets following a turbulent start to the year, strategists at HSBC Holdings Plc are urging caution when attempting to buy a dip in stocks.
"Cash is king in a world with [debt] overhangs," the team, led by Global Head of Asset Allocation Fredrik Nerbrand, said in a note published late on Thursday. "While markets have stabilized following the January sell-off, we find limited reasons to add to equity risk. We prefer to have allocations to high-yield and emerging market debt where risk premia are more appealing."