HSBC strategist on AI bubble, Fed outlook, and market positioning (with Vonnie Quinn)

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HSBC 8.0
Investment Bank $1686.00B
Max Kettner 8.5

HSBC strategist on AI bubble, Fed outlook, and market positioning (with Vonnie Quinn)

ndx

Absolutely wouldn't take money off the table. I would do the opposite. You'd have to lean back in Remains positive on equities despite recent tech selloff, sees continued AI capex driving earnings

10/21/2025 2:06:48 AM	short term up	5 days later	+3.79%	+3.79%
10/20/2025 11:51:24 PM	short term up	6 days later	+2.76%	+2.76%
8/19/2025 9:14:27 PM	short term up	5 days later	+0.76%	+0.76%

Asking about AI bubble concerns and market outlook between now and potential bubble pop in 2026-27

Vonnie Quinn
Max Kettner

Remains positive on equities, sees continued AI capex driven by one-big beautiful bill incentives through first half of next year

Q3 earnings beat rate was best since COVID, not just tech but broad-based surprises; people underestimating capex incentives
Max Kettner

We're pulling growth forward ahead of midterms, creating potential cliff in capex from 2026-27 but that's 3-4 quarters away
Should investors take money off the table given recent market weakness?

Vonnie Quinn
Max Kettner

Absolutely wouldn't take money off table, would do opposite and lean back in

Expects more liquidity from Treasury drawdown and Fed to avoid year-end funding squeeze; sees asymmetric positive from activity data post-shutdown
Max Kettner

If data beats expectations despite shutdown, market will see underlying growth stronger than thought

Consensus expects only 1% Q4 growth and 1.3-1.4% Q1 growth, showing pessimism in expectations
Will new trade deals on food commodities make dent on inflation?

Vonnie Quinn
Max Kettner

Don't think food tariff cuts will significantly impact inflation

Food inflation running around 3% year-over-year and stable, unlike goods inflation that picked up due to tariffs; food has smaller weighting than rent/shelter
What will Fed do given hawkish Fed speaker comments?

Vonnie Quinn
Max Kettner

Still has December cut in base case, bond market will lean into disappointing labor data

If October/November payrolls disappoint, reopens door for December cut
Max Kettner

Has issues with terminal rate pricing around 3% for March/April 2027, thinks should be closer to 3.5%

Initial repricing higher in rate expectations driven by better activity/earnings won't hurt valuations, but above 3.5% terminal rate starts putting dent on risk asset valuations

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