Investing.com -- HSBC said in a note Monday that momentum unwind following the release of Moonshot's Kimi K3 model is likely to remain an idiosyncratic issue rather than spill over into a broader risk-off environment, though the bank flagged emerging warning signs in its sentiment and positioning framework. The bank continues to favor European equities, particularly banks, as well as the equal-weighted S&P 500, and Magnificent Seven names over semiconductors in the U.S. However, HSBC noted risk assets have been broadly flat since the beginning of June, while U.S. equity market breadth has risen to its highest level in more than a year and a half. The bank's sentiment and positioning framework "has also started to flash some warning signs last week," with long-only investor positioning becoming "decidedly more risk-on lately," suggesting it "may well be time to reduce risk in portfolios" after peak earnings season. Related articlesHSBC sees "some proper warnings signs emerging" in risk assetsBuy the dip in EDA stocks as Kimi K3 boosts agentic AI thesis: MizuhoChip giant ASML to offer €20,000 bonus to retain staff through 2030