The image can be found at the following link:
In an article update on Wednesday, HSBC announced adjustments to their investment strategies, specifically in regards to equity markets in various regions. The bank has demoted Canadian equities from Neutral to Underweight, while raising UK equities from Underweight to Neutral.
HSBC also upgraded developed Asia (excluding Japan) to Overweight from Neutral.
The institution informed investors that, according to their analysis model, equities in Canada and Japan, alongside Financials and Health Care, appear less appealing.
Despite the economic uncertainties, HSBC sees the UK as a cost-effective source of defensive, commodity, and yield exposure. They believe this could prove beneficial as we approach a more unstable second half of the year.
The downgrade of Canada in HSBC’s ranking is due to poor earnings momentum and the machine learning model’s assessment that the market has exceeded the macro fundamentals over the last three months.
HSBC continues to be Underweight on Europe, excluding the UK, as it faces more economic challenges compared to the US.
HSBC noted that despite poor macroeconomic data and negative earnings revisions, European equities have rallied due to what the bank considers unsustainable re-rating in valuations.
