HSBC’s top multi-asset strategist Max Kettner is maintaining the bank’s most aggressive pro-risk stance on global equities, rejecting calls to pare back positions after improving sentiment linked to the Middle East. Kettner said HSBC’s aggregate sentiment and positioning framework is "not sending a sell signal yet," and he dismissed the notion that markets will react to positive headlines with a sell-off - saying calls for "'buy the rumour, sell the fact' with regard to the Middle East conflict are misplaced."
In a client note, Kettner highlighted that systematic strategies remain underweight overall and "have some further room to buy," suggesting that additional favourable developments from the Middle East could lift risk assets and broaden any equity rally.
Given the still-light systematic positioning, HSBC judges downside risk from adverse headlines to be limited. As a result, the bank keeps a maximum overweight in global equities, covering both U.S. and Asian markets. It also retains a more-than-double overweight in local emerging market debt and an overweight in high-yield credit. Conversely, HSBC remains most underweight in U.S. Treasuries, particularly when viewed relative to European government bonds.
Earnings and macro backdrop
Kettner pointed to one of the strongest corporate reporting periods since the pandemic reopening as a key driver behind the bullish view. Excluding technology companies, S&P 500 net income rose 11% quarter-on-quarter in Q1, and the share of companies beating EPS estimates was the highest since the COVID reopening in 2021. Remarkably, U.S. technology companies did not record a single below-consensus earnings-per-share print during the quarter.
Consensus forecasts for S&P 500 2026 earnings are continuing to climb, which HSBC notes runs counter to the normal seasonal pattern of downgrades through the calendar year.
On the macro front, U.S. consumption indicators point toward a re-acceleration. High-income households appear resilient, supported by wealth effects, a solid labour market and tax refund flows. Jobless claims are at a seasonal historical low on a non-seasonally adjusted basis. HSBC did flag some softness in high-frequency credit card data but attributed that weakness largely to base effects - specifically, tariff-driven front-loading of purchases that lifted spending in the same period a year earlier.
Regional preferences and sector tilts
HSBC’s positioning differentiates regionally and by sector. The bank prefers U.S. over European consumer discretionary stocks and within European equities shows a bias toward financials. On duration, HSBC retains a preference for European over U.S. exposure, reflecting the relative outlook for activity in the regions.
However, business surveys in Europe - including the German ifo index - are signalling a decline in activity, which supports a more cautious posture on European macro momentum.
Bottom line
HSBC’s stance is built on a combination of robust corporate results, improving earnings-per-share momentum, resilient U.S. consumption and light systematic positioning that could allow for further buying. The bank’s allocations reflect this view with heavy exposure to equities and select credit and emerging market debt, and a defensive stance toward U.S. government bonds relative to European sovereign debt.