Yongming Asset Management: Maintain a neutral view on Hong Kong stocks, pay attention to the short-term correction risk in US stocks

According to the Zhitong Finance APP, Sun Life Asset Management stated that the market experienced sharp fluctuations in the first half of this year, with investors feeling as if they were on a tariff roller coaster, and market uncertainty is expected to persist for some time. In light of the downgrade of the U.S. sovereign credit rating and the economic downturn in the U.S., it is anticipated that the U.S. stock market may exhibit more volatility in the second half of the year. Investors are advised to consider diversifying some U.S. assets to other regions while strengthening control over portfolio risks, constructing a balanced investment portfolio, and flexibly adjusting investment strategies to cope with potential market fluctuations and seize market opportunities.

Gong Wei Yi, Chief Investment Strategist at Sun Life Asset Management (Hong Kong), pointed out that the increase in tariff rates on Chinese imports by Trump is expected to exacerbate the drag on exports. However, the Chinese government has not taken aggressive domestic stimulus measures before imposing additional tariffs, which suggests an increased possibility of expanding support for consumption in the future. The firm is closely monitoring the progress of trade negotiations between China and the U.S. and the extent of the economic impact from tariffs, maintaining its outlook for the overall Hong Kong stock market, with a slightly conservative (neutral) view on stocks and a selectively positive (favorable) view on bonds, while cash allocations have been raised to neutral as a defensive asset to help reduce the overall portfolio beta.

Yan Jianhua, CEO of Sun Life Asset Management (Hong Kong), stated that the market uncertainty triggered by tariff news remains high in the medium to short term, leading investors to allocate funds to lower-risk assets. Given the cooling inflation, slow progress in economic recovery, and expectations of escalating trade tensions, it is anticipated that the European Central Bank will further cut interest rates. On the other hand, credit will continue to offer attractive interest rates. The firm holds a cautiously optimistic overall view on global bonds, with a particular focus on investment-grade credit, believing that the bond asset class can enhance risk management in the portfolio.

The firm mentioned that in the U.S. stock market, the tariff policy of the Trump administration has brought uncertainty to the economy and the stock market, with concerns about the negative impacts of new policies, such as inflation and recession. However, recent data shows economic resilience, with corporate profits experiencing negative revisions, but capital expenditures in artificial intelligence remain robust. The market has digested expectations of a slowdown in interest rate cuts, but future interest rate trends will still depend on data. As the market rebounds from the April correction, valuations have become somewhat concerning again. In the long term, the firm remains optimistic about growth sectors but emphasizes the need for patience and vigilance regarding short-term correction risks. The firm holds a neutral assessment of the performance of the U.S. stock market