HSBC cuts U.S. exposure, boosts EM equities
HSBC has reduced its exposure to U.S. equities while increasing allocations to Europe and emerging markets, saying its tactical asset allocation remains “firmly risk-on.”
The shift follows what the bank described in a note as rapidly changing bearish narratives that have failed to derail its constructive market stance, News.az reports, citing BBC.
The bank’s chief multi-asset strategist, Max Kettner, said “the bearish narratives change almost daily nowadays,” citing concerns ranging from geopolitics to debates over Federal Reserve independence and speculation about an AI-driven economic downturn.
Despite the noise, he wrote that HSBC’s cyclical and machine-learning indicators “remain risk-on.”
HSBC stated that sentiment and positioning indicators are “firmly neutral,” with cyclical models strengthening notably in recent months.
“A lot of our cyclical leading indicators have shot higher in the last two months, including on the capex and the manufacturing side,” the Kettner wrote. HSBC’s valuation-adjusted momentum and machine-learning gauges are “all sending a green light.”
As a result, HSBC is now “more OW in ex-US equities,” while raising its underweight in U.S. Treasurys.
The bank maintained an overweight in high-yield credit and emerging-market debt and added to emerging-market exposure both in equities and FI.
The firm closed its tactical overweight in Japan and ended its underweight in Japanese government bonds. It also closed its overweight in U.K. gilts, while cutting Treasurys “to a much deeper UW now.”
By Faig Mahmudov
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