CNBC Pro: HSBC lists 3 “undervalued” Asian stocks to watch in 2025 – one with 63% upside potential
HSBC said Asian markets will look “very different” in 2025 given China’s new policy measures, India’s economic slowdown and Southeast Asian countries’ investment in new infrastructure.
Still, there are several stocks that could “benefit from these changes in Asia as they are best positioned to seize growth opportunities from these opportunities,” the bank’s analysts noted. Our analysts take a bottom-up perspective. I also like this.”
“In focusing on these stocks, we decided to look outside the general hold consensus and our goal is to focus on quality stocks that are relatively undervalued,” they said.
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— Amala Balakrishna
Deutsche Bank says ‘major correction’ comes after stock markets have been so nervous in the past
Deutsche Bank macro strategist Henry Allen said in a note to clients this week that stocks will always pull back when valuations are as stretched as they are now.
“Turning points may come quickly, and … when valuations are initially stretched, room for further upside may be limited,” Allen noted. “(E)storical examples of high returns have often been accompanied by sizable returns. reversal.”
The bank cited the current high reading as Cyclically Adjusted Price to Earnings Ratio (CAPE) Posted by economist Robert Shiller, who argued that “the S&P 500’s CAPE ratio has been higher than it is today on only two other occasions in the last century.”
In the period before the dot-com bubble of the late 1990s and the global financial crisis of 2008, “because valuations were already so high to begin with, there was little room for further upside, and each time was followed by a major correction.” Lun wrote. “In fact, both times CAPE ratios got to where they are today and then there were major corrections.”
——Scott Schniper
Fed Governor Bowman says inflation progress has ‘stalled’
Federal Reserve Governor Michelle Bowman said on Wednesday that progress toward returning inflation to the central bank’s target has slowed.
“We have not yet achieved our inflation target, and as I have noted before, progress in lowering inflation appears to have stalled,” Bowman said in remarks in West Palm Beach, Florida. “I think the price stability aspect of our mission is more challenging. “There are big risks, especially with the labor market still close to full employment, but it’s also possible that we could see labor market conditions worsen.”
Recent data shows that while the all-items consumer price index edged higher in October and core interest rates have indeed remained stable at around 3.3% since August, the Fed is close to its 2% inflation target.
Inflation concerns led Bowman to vote against a 0.5 percentage point cut in September, although she voted for a 25 percentage point cut earlier this month, which she had preferred in her original move. The policymaker said she carries out her duties and considers the inflation mandate “in an independent manner, relying on facts, analysis, my own experience and judgment.”
“In some cases, this resulted in me deviating from my colleagues’ views,” she said.
— Jeff Cox
Fed Governor Cook expects further interest rate cuts as inflation eases
Federal Reserve Governor Lisa Cook said on Wednesday that despite some recent signs of weakness, she expects inflation to continue to slow and the labor market “remains solid.”
As a result, she expects the central bank to continue lowering its benchmark interest rate, although the path ahead remains uncertain.
Cook said at the meeting: “Looking forward, I continue to believe that the appropriate path for policy rates is downward, but the magnitude and timing of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” University of Virginia.
While inflation, especially core inflation, which excludes food and energy, remains above the Fed’s target, she expects it to continue to gain ground as price increases for housing services such as rent slow.
— Jeff Cox
