HSBC Raises Equity Allocation to Maximum Overweight: Peak Panic Over Iran Oil Prices Has Passed
Claire Weston
HSBC's chief multi-asset strategist Max Kettner has raised equities to the highest overweight, calling the Iran oil-price shock a peak-panic moment — positioning indicators have hit COVID-era extremes, which he reads as the signal to buy.
Why is HSBC suddenly going all-in on stocks?
Kettner's core argument: oil prices plunged 14% in a single day to $80 a barrel, after briefly nearing $120 earlier in the week — he sees that violent reversal as the signature of panic peaking.
This means → the scenario the market feared most — an Iran conflict sending oil out of control — is being rejected by the price action itself, not confirmed.
He also flagged that some positioning gauges have reached COVID-era extreme readings — in plain terms, sellers have already sold everything they could.
What gives him the confidence to call a buy here?
Kettner draws two precedents: the COVID crash and last year's April tariff shock — in both cases, equities went on to hit all-time highs once panic faded.
In plain terms = his logic is that markets tend to rebound harder than expected after being scared to extremes, and the positioning data suggests we are already at that extreme.
His own words: "For us to turn bearish now, we would need to expect conditions to deteriorate further from here, not merely stay the same."
What to buy? Where is his strategy pointing?
Regional preference: Asia and Europe first, with an explicit overweight on Japanese equities.
Stock-picking logic: hunt for assets whose fundamentals haven't changed but whose prices have overshot to the downside — as he put it, "buy whatever has fallen the most since the Middle East conflict."
This means → this is not a fundamental call on any single sector — it is a pure panic-repair trade, betting that once sentiment normalizes, prices will snap back.
Where is the risk? What could go wrong with this call?
The S&P 500 sits only about 2.5% below its all-time high, yet volatility remains elevated — the VIX (a gauge of market fear) spiked above 30 on Monday and still trades above 20.
In plain terms = prices look almost recovered, but the market's "nervousness meter" hasn't actually calmed down — that gap means sharp swings are still possible in the short term.
Kettner himself concedes the next few days and weeks could be choppy, but stresses the key point: "Things have improved from where they were Monday morning."
Content is for reference only, not financial advice.