An IMGW News Report
HSBC has downgraded its outlook on US equities, citing mounting uncertainty over tariffs, while adopting a more optimistic stance on European stocks, buoyed by Germany’s fiscal easing. The bank has revised its US equities rating to “neutral” and upgraded European stocks—excluding the UK—from “underweight” to “overweight.”
The shift comes amid growing concerns over US trade policy under the Trump administration and the increasing appeal of European markets, buoyed by a proposed €1.1 trillion fiscal stimulus package.
Meanwhile, China’s emergence as a leader in the technology race is seen as a potential catalyst for capital flows away from the United States.
The S&P 500 has retreated 6.1% from its record high on 19 February, reflecting fears that trade tensions could erode corporate profits and weigh on economic growth.“It is important to stress that we are not turning negative on US equities,” said HSBC’s global equity strategist, Alastair Pinder. “However, tactically, we see better opportunities elsewhere for now.”
Morgan Stanley’s equity strategist, Michael Wilson, predicts that the S&P 500 could decline a further 5% to 5,500 points by mid-year before rebounding to around 6,500 by year-end—a 12.7% increase from its most recent close.“The market is likely to remain volatile as investors assess mounting growth risks, which may worsen before improving,” Wilson noted in a briefing on Monday.
