HSBC has reduced its exposure to U.S. equities while increasing allocations to Europe and emerging markets, maintaining a "firmly risk-on" tactical stance. The shift follows rapidly changing bearish narratives that have failed to derail the bank's constructive market outlook.

Chief multi-asset strategist Max Kettner noted that "bearish narratives change almost daily nowadays," citing concerns from geopolitics to Federal Reserve independence debates. Despite this noise, HSBC's cyclical and machine-learning indicators remain positive, with cyclical models strengthening notably in recent months.

The bank is now "more OW in ex-US equities" while raising its underweight in U.S. Treasurys. HSBC maintained an overweight in high-yield credit and emerging-market debt, adding exposure to both emerging-market equities and fixed income. The firm closed its tactical overweight in and ended its underweight in Japanese government bonds.