Global Private Banking Two milestones ahead – before we would see more for improved total returns. We take a While we remain cautious on global sustained and widespread support balanced equities for now, we could take more for stocks. view between growth and value. positive steps when two milestones In the meantime, we focus on quality While we pay close attention to are reached. Further evidence companies that produce solid cash sector bets, this remains a stock- of rates peaking would benefit flows and maintain low levels of pickers’ market, and close attention rate-sensitive stocks, including net debt. We also continue to look should be paid to resilience of technology. But we would need for income, either through dividend underlying business models. to reach the second milestone – a payouts or stock re-purchase stabilisation of growth and earnings programs to enhance the potential Higher rates have hurt growth stocks, while high dividend stocks have done well. Amid the slowdown, the recent pickup in cyclicals looks odd to us. 120 Cyclicals / Defensives ratio ale / rot ratio 110 Dividend stocs / ­C€ orld ratio o g100 s a r a e e y90 v 0 fi 0 o 180 d t e s a 70 b e r 60 50 Nov-17 Nov-18 Nov-19 Nov-20 Nov-21 Nov-22 Source: Bloomberg, HSBC Global Private Banking as at 22 November 2022. Past performance is not a reliable indicator of future performance. 27