JPMorgan and HSBC View Market Pullback as an Opportunity for Rebalancing

Huo Xing Finance reports that on July 6, as the second half of the year begins, multiple Wall Street institutions view the recent market pullback as an opportunity to rebalance portfolios rather than a reversal of the broader trend. Both JPMorgan Chase and HSBC Holdings believe that short-term volatility in global equities will not alter the overall upward outlook, though the two institutions differ in their specific allocation strategies. Mislav Matejka, Global and European Equities Strategy Head at JPMorgan Chase, and his team have maintained a “buy on dips” stance since the outbreak of the Iran conflict. The bank believes the global economy remains resilient, that the Middle East situation has not significantly undermined growth, and that central banks have not shifted toward more aggressive monetary tightening. Strategists expect global and emerging market equities to reach new highs in the coming period and see growing international appeal, suggesting that the Korean market, following recent corrections, presents a compelling opportunity for accumulation. In terms of sectors, JPMorgan Chase sees renewed buying opportunities in the Philadelphia Semiconductor Index after its recent pullback but remains relatively cautious on large-cap U.S. technology stocks. The bank advises caution toward AI-disruptive sectors, including software, business services, and media; conversely, basic resources sectors have regained attractiveness following recent corrections, and gold is becoming increasingly appealing. Strategists also note that overall investor positioning remains conservative, with substantial cash holdings still on the sidelines; should a seasonal pullback occur over the summer, capital is likely to flow back into equities. Max Kettner, Head of Multi-Asset Strategy at HSBC Holdings, places greater emphasis on recovery opportunities for leading AI companies. He notes that the market is entering the typical July–August summer rally, and that ultra-large cloud service providers in AI have already experienced cumulative corrections of approximately 20%, which he considers excessive. Kettner believes market expectations for these companies’ earnings have been significantly lowered, yet their underlying profitability remains strong; if these firms can demonstrate that their massive AI capital expenditures are gradually translating into revenue growth, it will further drive valuation recovery.