HSBC has shifted its tactical asset allocation away from U.S. equities and toward non-U.S. markets, increasing exposure to Europe and emerging markets while maintaining an overall "firmly risk-on" stance, the bank said in a note outlining its latest positioning.
The banks chief multi-asset strategist, Max Kettner, characterized the external commentary around markets as volatile, writing that "the bearish narratives change almost daily nowadays." He cited a varied set of concerns that have surfaced in public debate, including geopolitics, discussions about the independence of the Federal Reserve, and speculation about an AI-driven economic downturn.
Despite that backdrop of shifting negative storylines, Kettner said HSBCs internal indicators provide a constructive signal. He wrote that the banks cyclical and machine-learning indicators "remain risk-on," and that sentiment and positioning gauges are "firmly neutral."
HSBC highlighted an improvement in its cyclical models over 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," Kettner wrote, and added that the firm's valuation-adjusted momentum and machine-learning gauges are "all sending a green light." Those readings informed the banks reweighting across equities and fixed income.
The tactical moves include a greater overweight in ex-U.S. equities - a deliberate step to increase allocations outside the United States - and a more pronounced underweight in U.S. Treasurys. HSBC also kept an overweight position in high-yield credit and in emerging-market debt, and it increased emerging-market exposure across both equities and fixed income.
On regional positioning, HSBC closed its tactical overweight in Japan and removed its underweight in Japanese government bonds. It likewise closed its overweight in U.K. gilts. By contrast, the bank said it has cut Treasurys "to a much deeper UW now." HSBC explained that the overall positioning reflects stronger global cyclical momentum and comparatively brighter prospects for manufacturing-driven markets such as Australia and Sweden.
About the evaluation tool mentioned
The note also referenced a proprietary evaluation framework that assesses HSBC alongside thousands of other companies using over 100 financial metrics and AI-driven analysis. The description states this tool uses machine methods to generate stock ideas and to assess fundamentals, momentum, and valuation without bias. As examples of past outcomes noted in the material, the tool identified Super Micro Computer (+185%) and AppLovin (+157%) as notable winners. The material invites readers to explore whether HSBC is currently featured in any such strategies or if there are alternative opportunities in the same space.
HSBCs latest tactical reweighting emphasizes a pivot away from U.S. sovereign debt and U.S. equities toward markets and instruments the bank believes are better positioned amid improving cyclical indicators and favorable machine-learning signals.