HSBC chief multi-asset strategist Max Kettner is maintaining an aggressively bullish stance on global equities, arguing that investors should not rush to lock in gains despite easing tensions in the Middle East and improving market sentiment.
Kettner said the bank’s combined sentiment and positioning indicators are “not sending a sell signal yet,” rejecting the idea that markets have already fully reflected recent geopolitical optimism.
“Most notably, we think systematic strategies have some further room to buy. So any potential further supportive news flow from the Middle East may well lift risk assets and lead to a more broad-based equity rally again,” he said in a research note.
He also argued that downside risks tied to negative headlines remain limited because systematic investors are still relatively lightly positioned.
As a result, HSBC continues to hold its maximum overweight allocation to global equities, including both U.S. and Asian markets. The bank also retains a more-than-double overweight position in local emerging-market debt and remains overweight high-yield credit.
At the same time, HSBC continues to hold its strongest underweight position in U.S. Treasuries, particularly relative to European government bonds.
According to Kettner, optimism toward equities has been reinforced by one of the strongest corporate earnings seasons since markets reopened following the pandemic.
Excluding technology companies, first-quarter S&P 500 net income rose 11% quarter-on-quarter, while the earnings beat rate reached its highest level since the post-COVID rebound in 2021.
Notably, no major U.S. technology company reported earnings per share below consensus forecasts during the quarter.
Analyst expectations for 2026 S&P 500 earnings also continue to trend higher, defying the typical pattern of downward revisions over the course of the year.
On the macroeconomic side, HSBC said U.S. consumer data still points to renewed momentum, supported by resilient high-income households, strong labor market conditions, wealth effects and tax refunds.
The bank noted that jobless claims remain historically low on a non-seasonally adjusted basis.
Although some weakness has appeared in high-frequency credit card spending data, HSBC attributed this mainly to base effects linked to tariff-related front-loading that boosted spending levels during the same period last year.
The outlook in Europe remains weaker by comparison. HSBC said business surveys, including Germany’s ifo index, already suggest slowing activity across the region.
As a result, the bank continues to favor European duration over U.S. duration, prefers U.S. consumer discretionary stocks relative to Europe, and within European equities maintains a preference for financial shares.