HSBC's Max Kettner says strong corporate earnings and fair valuations will support further gains in the S&P 500 and other risk assets, even as trade tensions weigh on sentiment.
HSBC strategist Max Kettner cites robust earnings and reasonable valuations as key supports for risk assets, suggesting the S&P 500 has further room to advance.
He noted that earnings and valuations are buoying risk assets, recommending an overweight position in equities.
The index is expected to continue its upward trend as corporate profits remain robust and multiples have room to expand from current levels.
HSBC strategist Max Kettner argues that robust corporate earnings and reasonable equity valuations provide a solid foundation for risk assets. His call contradicts bearish sentiment amid trade tensions and slowing growth fears, pointing to further upside for the S&P 500. The note highlights that earnings season has been stronger than expected, with profit margins holding up well, while forward P/E ratios remain below historical averages, supporting the bull case.
HSBC strategist Max Kettner argues that risk assets, particularly stocks, are supported by strong earnings and attractive valuations, suggesting further gains ahead.
He points to forward P/E ratios that remain below historical averages, implying that equity prices are not excessively expensive despite recent market gains.
The main risks include a sharper-than-expected slowdown in global growth, escalating trade tensions, and a significant rise in interest rates that could compress equity multiples.