HSBC says there are reasons to cautious in the US equity markets, including:
- seasonality
- US election
But:
- we think the market may have got the order of the positioning the wrong way around
- Low near-term US earnings expectations now set us up for a further squeeze higher in equities
After the election it could be a different story though:
- we are starting to become increasingly skeptical about a sizable post-election rally
- Our view continues to be the exact opposite of the apparent current consensus: if we had to sum it up real quick, do the opposite of what worked in Q3
