Max Kettner, chief multi-asset strategist at HSBC, argues that equities have shown remarkable resilience despite recent global shocks. While AI is often credited for strong US earnings, broader factors like higher nominal growth and low corporate tax rates have driven performance. Outside the US, earnings growth has also risen.

The US economy has consistently outperformed expectations, supported by a strong consumer base. Increased allocations to equities are expected as bonds lose their diversification benefits. The wealth effect, driven by rising household assets, further supports spending and investment.

Central banks now possess more tools to manage crises, enhancing market confidence. Lower oil intensity in developed economies reduces vulnerability to energy shocks. Additionally, low private sector leverage and reduced interest rate sensitivity bolster equity markets.