Warning Signs Flash for HSBC, Merrill in Emerging Market Rally
- HSBC cautious on hawkish Fed, BofAML on bullish U.S. eco data
- JPMorgan AM, Amundi and Hermes are among bulls for EM stocks
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The backlash to the world’s most-popular trade is underway -- the emerging market rally has now gone too far, according to HSBC Holdings Plc and Bank of America Merrill Lynch.
A combination of potentially hawkish Federal Reserve surprises and already stretched performance has convinced HSBC strategists including Max Kettner to turn cautious on emerging-market assets, while Merrill Lynch strategist Ralf Preusser thinks developing-nation bonds are vulnerable to positive U.S. data releases.