Group 1: Core Investment Strategy - HSBC emphasizes the importance of diversified asset allocation across asset classes, industries, and regions to enhance portfolio resilience in a changing environment [1][2] - The bank anticipates two 25 basis point rate cuts by the Federal Reserve in December and March, potentially lowering the federal funds rate target range to 3.50%-3.75% by the end of next year [2] - HSBC recommends investing in high-quality bonds to prepare for the new round of rate cuts, highlighting the opportunity to lock in current yields before further declines in cash rates [2] Group 2: Regional Diversification - HSBC maintains a positive outlook on global equities, particularly in the US, Asia, and the UAE, with a focus on Singapore stocks due to their defensive advantages and attractive dividends [3] - The bank has adjusted its view on Indian stocks from positive to neutral due to short-term cyclical headwinds, while remaining optimistic about the growth prospects in Asian markets [3] - The favorable environment for corporate earnings in the US, driven by AI and economic growth, supports HSBC's positive stance on US equities [3] Group 3: AI and Sector Opportunities - HSBC expresses a strong positive outlook on the opportunities presented by artificial intelligence, noting its potential to enhance productivity and create new revenue streams [4][5] - The demand for digital infrastructure is accelerating the adoption of AI applications, with the industrial sector becoming a strategic focus globally [5] - HSBC identifies attractive investment opportunities in the information technology, communication, industrial, and financial sectors in the US, while focusing on non-essential consumer goods, finance, communication, and healthcare in Asia [5]

Core Viewpoint - The Federal Reserve has resumed its rate-cutting cycle, lowering the federal funds rate by 25 basis points to a target range of 4% to 4.25%, with expectations of further cuts by the end of the year [1] Group 1: Future Rate Cuts - Barclays' chief U.S. economist anticipates two more rate cuts of 25 basis points each in October and December [2] - ICBC International expects a total of 75 basis points in rate cuts by the end of the year, citing a shift in focus towards the labor market [2] - HSBC predicts potential rate cuts in December and March, with an increased risk of multiple cuts if labor market data worsens [3] Group 2: Economic Signals - The FOMC's economic projections indicate a lower rate path than previously expected, with three rate cuts anticipated this year [5] - The voting dynamics within the FOMC showed unexpected support for the majority opinion, despite prior dissenting views [5][6] - The Fed's statement reflects a hawkish tone, acknowledging rising inflation while recognizing increased risks in the labor market [6] Group 3: Global Financial Market Impact - Continued rate cuts by the Fed are expected to accelerate global asset repricing, favoring physical assets and precious metals [8] - HSBC emphasizes the importance of diversified asset allocation across regions and sectors to enhance portfolio resilience [8] - The decline in interest rates is projected to alleviate corporate financing pressures and support earnings expectations in the U.S. equity market [9] Group 4: Emerging Markets Impact - The Fed's easing policy is anticipated to provide more operational space for the People's Bank of China to support economic growth and stabilize the yuan [10] - HSBC maintains a positive outlook on emerging market equities, particularly in Asia, due to favorable conditions stemming from a weaker dollar [10] - The expectation of a weaker dollar may lead to accelerated capital flows into emerging markets, benefiting countries with manufacturing and resource exports [10][11] Group 5: Gold Market Outlook - Despite a negative short-term reaction in gold and silver markets post-Fed meeting, the long-term outlook remains positive due to expected lower U.S. rates and a weaker dollar [12] - HSBC continues to favor gold as a hedge against global policy and economic uncertainties, advocating for a broader asset allocation strategy [13] - The backdrop of declining interest rates and rising risk premiums is expected to provide support for gold prices [13]