Key facts
- HSBC cited renewed geopolitical tensions in the Middle East and worries over potential AI regulation.
- The brokerage is more cautious on euro zone equities and emerging markets.
- Sovereign bonds could see support from a potential AI slowdown or midterm gridlock.
HSBC downgraded its global equities stance to neutral from max overweight on Monday, citing renewed geopolitical tensions in the Middle East and worries over potential AI regulation ahead of the US midterm elections. The brokerage had been "max overweight" stocks and "max underweight" sovereign bonds since mid-March but stated it could no longer maintain the same level of conviction. HSBC also double-upgraded developed-market sovereign bonds to "overweight" from "max underweight", noting potential support from an AI slowdown or midterm gridlock. Separately, the brokerage cut its "overweight" stance on gold and moved oil higher to an "overweight" rating.