HSBC Sees Opportunity in Tech Stocks Amid Market Volatility

According to PANews, recent market volatility, particularly in technology stocks, has created a buying opportunity, according to HSBC's multi-asset strategists. Despite the S&P 500 index being less than 5% away from its all-time high, market sentiment and positioning have been notably impacted. Since October, high-yield bond spreads have widened by less than 30 basis points, while emerging market bond spreads have narrowed, contributing to the unusual market conditions observed in recent weeks. HSBC highlights that the VIX futures curve has shown a spot premium, indicating traders perceive more uncertainty in the short-term market compared to the long-term. This is largely attributed to concerns over the most speculative segments of the market. Despite these concerns, bottom-up consensus expectations suggest that the S&P 500's net profit, excluding the technology sector, will decline by 8% quarter-on-quarter. HSBC notes that such low expectations set a lower bar for the fourth-quarter earnings season in early 2026. Additionally, the anticipated interest rate cut by the Federal Reserve in December is expected to ease tensions and improve market sentiment. HSBC concludes that the current environment is favorable for increasing risk positions rather than reducing them.