HSBC Upgrades Emerging Market, Brazilian Stocks to Overweight, Cuts Mainland European Stocks to Underweight

A strategist at London's HSBC made several interesting regionally-based calls this morning:

• upgraded Emerging Market stocks two notches from Underweight to Overweight
  
• downgraded European stocks (excluding the UK) to Underweight
  
• upgraded Brazilian stocks from Underweight to Overweight

The strategist called stocks in Brazil, Russia and Korea "very attractive." Specifically for Brazil, the HSBC strategist noted that change was "partly a valuation call--Brazil no longer appears to be expensive, trading on a 12-month forward PE of 9.1 times." Further, HSBC points out that most of the cyclical issues present in Brazil are "now well known" and likely priced into equities.

The iShares MSCI Emerging Markets ETF (NYSE: EEM) has tumbled about 2.2% today, while the iShares MSCI Brazil ETF (NYSE: EWZ) is down 2.1%.

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