HSBC strategist Kettner recommends reallocating U.S. mega-cap stocks ahead of earnings reports

HSBC strategists pointed out that the market consensus expectation for the S&P 500 index's earnings per share in the fourth quarter remains low, suggesting that investors reallocate their positions in U.S. mega-cap stocks ahead of key earnings reports this week. The team, including Max Kettner, stated that they continue to downplay the impact of geopolitical events, focusing instead on U.S. interest rates, interest rate volatility, and short-term growth expectations. The strategists believe that due to the U.S. labor market data likely remaining "sufficiently differentiated," there will not be a trigger for a rise in U.S. interest rate expectations into the "danger zone" in the short term. They maintain an overweight position in stocks close to their highest levels. At the individual stock level, they continue to overweight U.S. stocks (especially tech giants), Japanese stocks, Eurozone banks, and emerging market stocks. (Bloomberg)