Markets Fundamentally Have a Lot of Room to Go, Says HSBC's Kettner

Watch Markets Fundamentally Have a Lot of Room to Go, Says HSBC's Kettner - Bloomberg on Dailymotion

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00:00So, Max, I'm not sure if we've been speaking mid last week would have been so positioned so positively,

00:06but it certainly looks like all of the challenges are out of the way now.

00:09Is there a danger that some of this falls apart and everybody just flees the market?

00:15Yeah, good morning.

00:16Look, I think there is a danger that ultimately perhaps positioning is getting a little bit too stretched

00:22and at some point perhaps there's a bit too much positivity creeping into markets and into expectations.

00:28That, however, I think is really only a story sometime in the first half of next year

00:34because let's be honest, while we have seen some really nice positive earnings revisions in the last couple of months,

00:41particularly in the US and particularly driven by those companies that benefit the most from a weaker dollar,

00:47and while we have seen GDP upgrades, the level of those earnings expectations,

00:51those near-term earnings expectations and the level of near-term GDP expectations

00:56is still fairly low.

00:58We're only talking about barely 1% annualized GDP growth in terms of consensus expectations for Q4.

01:05When we look at now Q4 versus Q3, consensus is actually saying maybe earnings are not going to grow at all

01:11in the fourth quarter versus the reporting season that is underway right now.

01:15And, of course, we look at the earnings season at the moment and we are tracking

01:18at pretty much the best speed rate since COVID, since 2021.

01:23And all of that really tells us there is, I think, fundamentally still a lot of room to go,

01:28I think, in the next couple of weeks and months.