JPMorgan, HSBC: Market Pullback Provides Buying Opportunity, Not Trend Reversal

BlockBeats News, July 6th. As we enter the second half of the year, several Wall Street institutions believe that the recent market correction is more of a reallocation opportunity rather than a trend reversal. Both JPMorgan Chase and HSBC Holdings argue that the short-term volatility in the global stock market will not alter the overall upward trend, but these institutions differ in their specific allocation strategies.

JPMorgan Chase's Global and European Equity Strategy Head, Mislav Matejka, and the team mentioned that since the outbreak of the Iran conflict, they have maintained a "buy the dip" stance. The bank believes that the global economy remains resilient, the Middle East situation has not significantly disrupted economic growth, and central banks around the world have not shifted to a more aggressively tight monetary policy. The strategists anticipate that both the global stock market and emerging market stocks are likely to hit new highs in the future and see increasing attractiveness in international markets, with the South Korean market being worth buying on dips after its recent adjustment.

In terms of sectors, JPMorgan Chase views the recent pullback in the Philadelphia Semiconductor Index as another buying opportunity but remains relatively cautious on large US tech stocks. The bank advises caution in AI "disruptive" industries, including software, business services, and media sectors; on the contrary, the basic resources sector has regained allocation value after a recent correction, and gold is becoming more attractive. The strategist also points out that investors' overall positions remain cautious, with the market holding a significant amount of cash. If there is a temporary pullback in the summer, funds are likely to flow back into the stock market.

HSBC Holdings' Multi-Asset Strategy Head, Max Kettner, is more focused on the recovery opportunities of AI leaders. He stated that the market is entering a summer rally from July to August, and the mega-cap AI cloud service providers have experienced an accumulated pullback of around 20%, indicating an excessive decline. Kettner believes that the current market has significantly lowered profit expectations for these companies, yet these enterprises maintain strong profit capabilities. If the substantial AI capital expenditure can gradually transform into income in the future, it will further drive valuation recovery.