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2026-10-12 16:43:48 CLSA said in a research report that investors with less than a quarter century of market experience have never seen the 癒禮Fed model癒穡 favor bonds over equities. With the S&P 500 index surpassing 7,800 points and the US 10-year Treasury yield at around 5.3%, the model has shifted from favoring equities to favoring bonds for the first time in 25 years. The broker viewed this more as an observation than an asset allocation call, adding that its S&P 500 model implies only around 5% upside over the next year. The broker noted that the real yield on US Treasury Inflation-Protected Securities (TIPS) at around 3% remains attractive, while strong earnings momentum may temporarily prevent valuations from tilting further toward fixed income. However, equity exposure across multiple investor groups has already reached record highs. Institutional equity appetite, measured by net positioning in S&P 500 futures, fell further to the lowest level since Apr 2023, while household equity sentiment remained unusually elevated. The sentiment gap between institutional 癒禮fear癒穡 and retail 癒禮greed癒穡 continues to widen. The broker also said that over the past 10 weeks, US tech leadership has once again dominated returns, with the S&P 500 outperforming the equal-weight index by around 10%. A peak in yields, with 10-year TIPS currently at around 3%, may support long-duration large-cap tech stocks. However, the drivers behind declining yields are crucial: easing inflation would be positive, while macroeconomic deterioration would be negative. The broker's Asia-Pacific (excluding Japan) focus stock list includes TENCENT (00700.HK), CKH HOLDINGS (00001.HK), BYD COMPANY (01211.HK), CSPC PHARMA (01093.HK), NONGFU SPRING (09633.HK), TSMC (2330.TW), JSHL (601100.SH), CONTEMPORARY AMPEREX (300750.SZ), SK Hynix (000660.KS) and Kia (000270.KS). (da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |