Future Finance

The Credit Robot at HSBC Says Odds of a Bear Market Are Now 84%

Strategists plug decades of data into machine-learning model
Chance of U.S. credit bear market is highest since the crisis

Signage is illuminated atop the HSBC Holdings Plc headquarters building at night in Hong Kong, China, on Thursday, July 25, 2019. HSBC is scheduled to release interim earnings results on Aug. 5.Photographer: Paul Yeung/Bloomberg

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By Justina Lee

September 18, 2019 at 2:31 PM UTC

This article is for subscribers only.

From booming bond sales and benign default rates to benevolent central banks, all seems well in the credit market right now. That’s unless you ask the robot prognosticator at HSBC Holdings Plc.

The machine-learning model reckons there’s now an 84% chance of a bear market sweeping U.S. corporate debt within the next year. That’s the highest level since before the financial crisis and “a validation” of HSBC’s mildly bearish view, according to strategists led by Song Jin Lee.