Shaking Off Fear: Wall Street Strategists' Advice for Investors

Despite the recent drop in the S&P 500 and rising fear among investors, a team at HSBC led by chief multi-asset strategist Max Kettner advises investors to "shake it off" and not rule out an upside surprise. They believe that the recent pullback in risk assets is different from previous years, as it is not driven by anticipation of a significant growth slowdown but rather due to growth remaining resilient, particularly in the US. HSBC remains overweight on US equities and has increased exposure to the energy sector, while also favoring US risk assets over European ones. They argue that concerns about consumer credit, delinquencies, and the job market are overblown, and predict higher US growth and inflation in the coming months.