In a move that surprised clients, HSBC’s chief multi-asset strategist Max Kettner announced a shift in his US equity view ahead of the midterm election.
Kettner, who had earned the nickname ‘Max Bullish’ for his earlier bullish stance, reduced his allocation from maximum overweight to neutral, effectively cutting the portfolio’s exposure by 100%.
The adjustment follows growing investor unease over tighter AI regulation if Democrats win the election, and the risk of a flare‑up in the Iran war. Kettner noted that risk‑off mood is now steering flows into defensive assets, a trend he says needs weekly reassessment.
Bank of America strategist Michael Hartnett warned that risk‑off sentiment could persist into November, while Morgan Stanley’s Michael Wilson sees the midterms as a “clearing event” that may unlock gains once uncertainty fades.
Against this backdrop, Kettner remains bullish for 2024, citing the possibility of a diplomatic resolution to the Iran conflict and a dovish Federal Reserve as potential tailwinds. He expects to keep views updated each week until political risk subsides.
The broader market reacted with jitteriness: the S&P 500 slipped 0.7% on the day of the announcement, and investors are rebalancing portfolios to absorb the new stance on US equities.