Fears around a market rotation into broader risk-off are overdone – HSBC

HSBC's Chief Multi-Asset Strategist, Max Kettner, believes fears of a market rotation leading to a broader risk-off environment are exaggerated. He points out that the S&P 500 remains near record highs despite sector pullbacks, indicating a strong bull market. Kettner highlights that historical trends show similar situations did not result in major market declines. He suggests opportunities in sectors like retail, transport, homebuilders, and regional banks, and remains optimistic about European and Japanese banks. Kettner also downplays concerns about the U.S. dollar's stability, noting its range-bound performance.