HSBC says fears of an AI-driven market bubble are misplaced and that the odds favour a year-end “melt-up” in equities rather than a correction. Chief multi-asset strategist Max Kettner wrote that many investor pushbacks centre on supposed early warning signs, the “canaries in the coalmine”, but HSBC sees far fewer risks than the market narrative suggests.
Kettner noted that despite headlines about surging AI-related capital expenditure, broader corporate capex intentions remain subdued. Concerns about widespread layoffs also look overdone: references to job cuts have eased on recent earnings calls, and there’s still no strong evidence that AI adoption is triggering large-scale displacement.
He added that rising money-market inflows are now flashing a contrarian buy signal, while HSBC’s aggregate sentiment indicators sit squarely in neutral territory. With positioning not appearing stretched, Kettner said the backdrop supports staying firmly risk-on into year-end.
