One HSBC strategist is pushing back against doubters of the current stock market rally. The S & P 500 ‘s rally off its April lows has brought it back to roughly 1% off its record high in a very short time. It’s an advance that has perplexed many investors who worry the market’s insistence to look past war, tariffs, and other challenges to the economic outlook could mean another pullback is on the horizon. But Max Kettner, chief multi-asset strategist at HSBC, said he worries he’s not “bullish enough” on the current rally, saying he will remain risk on as investors are underestimating the potential upside. “In our mid-year outlook (11 Jun), we argued for a risk-on stance over the summer. This hasn’t been met with a lot of agreement in the last two weeks,” Kettner wrote Monday. “But, we think the biggest risk to our view is that we’re not bullish enough.” .SPX 3M mountain S & P 500, over three months For one, the strategist expects that softening earnings growth expectations have given companies a low bar to clear in upcoming reports, which could help their stock prices and the overall index. “Bottom-up Q2 EPS expectations are for SPX earnings to drop sequentially – this creates a very low bar to beat,” Kettner wrote. “So, even if growth numbers were to weaken compared to last year, it might well turn out to be better than current consensus expectations. ” He also said that the latest escalation of conflict in the Middle East has little bearing on the firm’s asset allocation strategy, citing the ability of the market to shake off the recent attacks between Iran and Israel. Another common worry that’s overblown is the potential future impact of tariffs, according to Kettner. The strategist said he expects that any fallout will be contained, especially if the Federal Reserve starts to cut interest rates in response to a softening economy, as many think may happen in the latter half of the year. “Risk assets have been remarkably resilient in the face of geopolitical escalation last week …with subdued sentiment and positioning and low near-term growth expectations overriding such concerns,” Kettner wrote. “We remain risk-on and stand ready to scale up our exposure further, particularly in the US risk assets.”
Investors are not ‘bullish enough’ on the stock market rally, HSBC strategist says
Jun 24, 2025
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