JPMorgan Chase, HSBC: Market Correction Provides Positioning Window, Not Trend Reversal

Mars Finance News: On July 6, as the year enters the second half, several Wall Street institutions believe that the recent market pullback is more of an opportunity for repositioning than a reversal of the trend. JPMorgan and HSBC Holdings both believe that short-term fluctuations in global stock markets will not change the overall upward outlook, but the two institutions differ in their specific positioning directions.

Mislav Matejka, Head of Global and European Equity Strategy at JPMorgan, and his team said that since the outbreak of the Iran conflict, they have continued to adhere to the view of “buying on pullbacks.” The firm believes that the global economy still has resilience; the situation in the Middle East has not clearly undermined economic growth; and central banks have not shifted toward more aggressive tightening policies. Strategists expect both global stock markets and emerging market equities to set new highs in the future. They also believe that the appeal of international markets is increasing, and that after recent adjustments, the Korean market is also worth positioning at lower levels.

In terms of the industry sector, JPMorgan believes that after the recent pullback, the Philadelphia Semiconductor Index has once again presented a buying opportunity, but it remains relatively cautious about U.S. large-cap technology stocks. The firm advises caution toward AI “encroaching-type industries,” including software, business services, and media sectors. By contrast, basic resources sectors have regained allocation value after recent adjustments, and gold is also starting to look more attractive. The strategists also noted that investors’ overall positioning is still somewhat cautious, and the market retains a large amount of cash; if there are pullbacks at some point during the summer, capital is expected to flow back into the stock market.

HSBC Holdings’ Head of Multi-Asset Strategy, Max Kettner, is more focused on recovery opportunities for AI leading companies. He said the market is entering a summer uptrend from July to August, and that AI hyperscale cloud service providers had previously accumulated a pullback of about 20%, with the decline already being excessive. Kettner believes that market expectations for these companies’ earnings have already been significantly reduced, and these enterprises still maintain strong profitability. He added that if it can be shown in the future that massive AI capital expenditures are gradually being converted into revenue, it will further drive a valuation recovery.