(Reuters) – HSBC reduced the US shares on Monday, referring to uncertainty around rates, while they became bullish on European shares after a boost from Germany who released his tax reforms.
The brokerage reduced US shares to “neutral” and raised the rating on European shares, with the exception of British shares to “overweight” from “underweight”.
The massive movements of the Trump government on the trade and other policy have injected uncertainty, while a proposed European tax bazooka of $ 1.2 trillion and the rise of China as the leader of the technical race marks a potential turning point for investor capital, away from the United States.
The S&P 500 has withdrawn around 6.1% from its record height of 19 February at the worries that the trade war will harm the business profit and slow growth.
“It is important to emphasize that we are not becoming negative on US shares – but tactically we see better opportunities elsewhere for the time being,” said HSBC’s global stock strategist Alastary Pinder.
Morgan Stanley Equity strategist Michael Wilson believes that the S&P 500 could still fall 5% to 5,500 points against the middle of the year, before the year ended at around 6,500, which is an advantage of 12.7% compared to the last Close of the benchmark index.
“The path is probably volatile because the market continues to consider these growth risks, which can get worse before they get better,” said Wilson of Morgan Stanley in a note on Monday.
(Reporting by Kanchana Chakravarty and Medha Singh in Bengaluru; adaptation by Shinjini Ganguli)
