HSBC's Max Kettner: Market weakness we'll see is due to top-down & bottom-up expectations

Economic Outlook - GDP growth expectations for Q4 are projected at 1%, with Q1 at 1.3% [2] - Earnings growth expectations for Q4 are flat quarter over quarter, with eight of the eleven S&P sectors expected to show sequential negative earnings growth [2][4] Sector Analysis - The technology sector is expected to see sequential positive earnings growth due to seasonal factors, while most other sectors are anticipated to post negative earnings growth [4] - There has been a noticeable shift in investor sentiment regarding the labor market, AI bubble, and private credit concerns over the past few weeks [6][7] Investment Sentiment - Investor positioning has shifted from being underinvested and ready to buy dips to expressing significant concerns about market risks [6] - The potential cliff event for AI capital expenditures is anticipated between 2026 and 2027, suggesting a borrowing of growth into 2026 that may impact future growth [9]