HSBC names the big market risks next year and says stock returns will be squeezed

LONDON — Investors should brace for a “pay-back period” in 2022 following a year of strong gains, as macroeconomic risks mount, according to HSBC Asset Management.

In its 2022 investment outlook, the bank said the bumper returns investors have enjoyed over the last 18 months were in large part “borrowed from the future.”

HSBC Asset Management Global Chief Strategist Joseph Little noted that bond yields, spreads and risk premia are all compressing. Risk premium is the amount of return an asset offers above the risk-free rate of return. 

As such, many asset class returns are lower than they…