Charles Schwab's Hong Kong financial advisor predicts that the Federal Reserve will cut interest rates twice this year, totaling a 50 basis point reduction. He is optimistic about the medium to long-term bond, financial, energy, and raw materials industries. He believes that the U.S. economy and stock market will continue to show a "K-shaped" recovery, with significant divergences possible. He advises investors to extend the duration of fixed income investments and invest in securities with better credit quality
According to the latest information from the Wise Finance APP, Charles Schwab's Hong Kong financial advisor Guo Mingshen predicts that the Federal Reserve will cut interest rates twice this year, possibly starting at the September interest rate meeting, with a total reduction of 50 basis points. In addition, he leans towards favoring medium to long-term bonds. At the same time, he also sees potential in the financial, energy, and raw materials industries. Guo Mingshen further points out that the U.S. economy and stock market continue to show a "K-shaped" recovery, with significant divergences likely to emerge in different sectors.
Guo Mingshen stated that a moderate government bond interest rate environment should be favorable for the stock market, but a significant increase or decrease in interest rates could lead to greater volatility. He believes that in the scenario of two interest rate cuts, there is a preference for medium to long-term bonds. Additionally, he sees potential in the financial, energy, and raw materials industries.
Furthermore, Lin Changjie, a financial advisor at Charles Schwab in Hong Kong, mentioned that finding the right combination of fixed income asset classes will be key to achieving good performance. He emphasized that for fixed income asset investors, the higher the current income, the less impact price fluctuations will have on the total return for investors.
He believes that investing in a diversified fixed income asset allocation with relatively good credit quality can help investors obtain attractive bond yield income, and the total return may also achieve a net return. In addition, he suggested extending the duration of fixed income investments to mitigate reinvestment risks. He also mentioned that investors should focus on securities with better credit quality, such as government bonds and investment-grade corporate bonds