HSBC is shifting its regional equity allocation, closing its overweight in emerging market equities and upgrading eurozone stocks to overweight while maintaining its maximum overweight on global equities overall. Chief Multi-Asset Strategist Max Kettner said the decision to close the EM overweight reflects heightened volatility in EM Asia, warning that any signs of AI capital expenditure being cut can hurt semiconductor stocks and disproportionately affect EM equities. HSBC raised eurozone equities to overweight, highlighting banks in particular, with Kettner noting that lower consensus growth expectations and the weaker euro should help over the summer months. The firm remains constructive on risk assets heading into the second half, with neutral sentiment and positioning alongside the upcoming second-quarter reporting season acting as the next upside catalysts. HSBC expects U.S. exceptionalism to unwind a little in late third quarter, which it believes risk markets will initially interpret positively in a bad-news-is-good-news Goldilocks regime.
HSBC Holdings PLCHSBC upgrades EU stocks and maintains overweight on global equities, reflecting positive strategic positioning.