HSBC's Chief Multi-Asset Strategist Max Kettner said the recent spike in oil prices driven by renewed Middle East tensions does not change the bank's bullish stance on risk assets. Kettner emphasized that the second-quarter earnings season is a more important driver, noting that U.S. banks have started well and sequential earnings growth expectations remain low despite high consensus estimates. HSBC maintains its overweight on the Eurozone and a broadening theme, while cautioning that momentum unwind could spell more trouble for U.S. small caps. The bank's sentiment and positioning framework does not yet point to a sell signal, with systematic investor positioning just about neutral, and its framework for U.S. Treasuries is moving closer to a buy signal. On oil, HSBC noted that sudden escalations have historically unwound quickly and the renewed tensions do not change the near-term supply glut, so the firm remains heavily underweight oil in its asset allocation. The tensions do affect the bank's view on rates, as front-end relative value still trades like an oil-proxy, reinforcing its overweight position in gilts. HSBC also pointed to the downside surprise in June's U.S. inflation print as a potential first sign of U.S. exceptionalism unwinding in the second half of the year.
HSBC Holdings PLCHSBC's strategist comments on oil spike, risk assets, and rates, but no direct impact on HSBC itself
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