HSBC Global Private Banking has released its investment outlook for the fourth quarter of 2024. The bank expects a soft landing for the US economy, believing that the market has overreacted to concerns about the risk of a recession in the US. It anticipates that the Federal Reserve will start a rate-cutting cycle in September, global stock markets will benefit from expanding corporate profits, central banks around the world will cut rates, and technological innovation will drive productivity upgrades, therefore maintaining an overweight allocation to global stocks and quality bonds. The bank holds a higher allocation to stocks from the US, UK, Japan, India, and South Korea. To deal with market volatility before the November US election, HSBC Global Private Banking has a higher allocation to hedge funds to manage portfolio volatility through a diversified asset strategy. Vance Kwan, Chief Investment Officer for HSBC Global Private Banking and Wealth Management Asia, stated that despite the gradual slowdown in US economic growth, there is no immediate risk of a recession in the US. With easing cost pressures, declining financing costs, and technological disruptions driving productivity growth, many companies continue to experience strong and steady profit growth, providing plenty of investment opportunities. It is expected that the Federal Reserve will cut rates three times in September, November, and December this year by 25 basis points each time, and will cut rates three more times in 2025 by 25 basis points each time. Rate cuts by central banks will have a positive impact on bond, stock, and asset valuations. Central bank rate cuts will reduce the attractiveness of holding cash, continuing a zero-cash allocation strategy and actively diversifying investments. Kwan pointed out that as we enter the fourth quarter, global market volatility may increase, and the focus will be on investing in quality stocks and high-grade corporate bonds, with a higher allocation to hedge funds and strategic investments in private markets to achieve portfolio diversification in response to rapidly changing global conditions. Kwan said that due to attractive yield levels and credit spreads, an overweight allocation to global investment-grade corporate bonds and high-quality emerging market and Asian major currency bonds is maintained. Bonds play an important role in providing stable returns and diversifying portfolio risks, with the correlation between stocks and bonds currently significantly decreasing and returning to negative territory, meaning that stock-bond diversified asset allocation has once again become a powerful diversification tool. Regarding the foreign exchange market, with the Federal Reserve starting a rate-cutting cycle, the interest rate differential between the US dollar and other major currencies will narrow, reducing the upside potential of the US dollar. Therefore, a neutral view on the US dollar was adopted last month. In the Asian currency market, it is expected that the Bank of Japan will not raise rates again this year, the Japanese yen does not have much room for significant appreciation from its current levels, and the forecast for the yen to reach 148 against the US dollar by the end of this year is maintained.