According to the latest investment report from Standard Chartered Wealth Solutions' Chief Investment Office, Democrats have secured control of both the House of Representatives and the Senate in this week's US midterm elections.
On oil, as supply chains gradually adapt to current conditions and Congress exercises oversight over defense spending, NYMEX crude prices may gradually decline toward the 12-month target level of $80 per barrel.
On equities, STANCHART (02888) wealth management said investors should continue diversifying stock allocations toward more defensive sectors. As the stock market enters the mid-cycle phase, the bank expects equities can still deliver positive annual returns of 8-10%, though slower than the rapid gains seen in the early cycle phase.
On bonds, STANCHART (02888) wealth management noted that recent widening of credit spreads has kept yields attractive. It prefers investment-grade corporate bonds issued by non-hyperscale cloud service providers, with maturities in the 3-7 year range along the yield curve. The bank still expects the Federal Reserve to raise rates two more times, with the dollar staying range-bound in the near term. However, as this mini hiking cycle ends in the second quarter of 2027, the market will begin to anticipate Fed rate cuts in the second half of next year, and the US Dollar Index may fall back to 98.5.
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