The five C‘s for a broadening: Global Equity Strategy

Research evidence excerpt

The five C‘s for a broadening: Global Equity Strategy

20 July 2026

The five C’s for a EquityGlobal Strategy

broadening

Global Equity Strategy

◆ We remain constructive on global equities but expect a Alastair Pinder, CFA

broadening in performance driven by the five C’s Head EM and Global Equity Strategist HSBC Securities (USA) Inc.

alastair.pinder@us.hsbc.com

◆ Corporate earnings, Central banks, Capex, Consumer and +1 212 525 5972

Capital flows Pankaj Agarwala*, CFA

EM and Global Equity Strategist

HSBC Securities and Capital Markets (India) Private

◆ Middle East tensions and higher energy prices are downside Limited

pankajagarwala@hsbc.co.in

risks, but for now offset by improving fundamentals elsewhere +91 0 80 30013716

We remain bullish on global equity markets, but are increasingly positioning for a * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

rotation in performance. Early signs of that shift are already emerging. Our global not registered/ qualified pursuant to FINRA regulations

long-versus-short momentum factor has fallen 15% over the past 3 weeks, but we

believe the reversal likely has further to run. The rally in momentum stocks year-to-

date has been one of the strongest on record. Historical precedent suggests that,

after a 20% rise in the momentum factor, the subsequent reversal typically persists

for around six months. The current episode is particularly unusual: after initially rising

20%, momentum subsequently squeezed another 25% higher. In our view, that

leaves the factor increasingly vulnerable to a sharper and more sustained reversal.

Other signs of a potential rotation are also becoming more evident. Concentration

across global equity indices – particularly in the US and EM – remains close to record

highs.